1951-05-21

Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, on a question of
privilege affecting myself and other members of the house, I should like to point out that in sessional paper No. 107-D, dated May 17, 1951, which was tabled yesterday, I find the following question by the hon. member for Calgary East (Mr. Harkness) with the following answer by the government. This is the third question in that sessional paper, and it has reference to the site of the printing bureau in Hull. The question and answer follow:
Q. How much was paid for the site on which the building is being erected?
A. Estimated cost-$496,817.56.
On checking back I find that in sessional paper No. 107-B, dated March 27, 1950, the following question was asked by the hon. member for Victoria, Ont. (Mr. Hodgson), and the following answer was given by the government:
Q. What was the cost of the site of the proposed printing bureau in Hull, Quebec?
A. Cost of the site to date, $824,979.72.
It is quite evident that an explanation is due from the minister as to this discrepancy, in that the answer tabled yesterday indicates a figure more than $300,000 less than the figure given on March 27 last year as to the cost to date.


Hon. Alphonse Fournier (Minister of Public Works):: Mr. Speaker, there is no doubt that the figures in the two answers do not agree. I shall look into them. On listening to the hon. gentleman I was struck by the thought that in one case the officials probably were referring to the exact site on which the printing bureau is being built, while in the other case they were including other properties which were expropriated but which will not actually form part of the site. That may be the explanation, but I shall certainly have the facts when I give the answer.



VISITORS IN GALLERY


Mr. J. R. Garland (Nipissing):: Mr. Speaker, may I be permitted to refer to a group of eighty-five students who are now in the gallery to our left? These young people come from all parts of northern Ontario, as far west as the Manitoba border, as far north as Kapuskasing, as far northeast as Rouyn and Noranda, and as far south as Graven-hurst. They are students who attend the normal school in North Bay, and are now enjoying a two-day trip to the capital city. May I through you, sir, express the sincere hope that their visit to Ottawa, and particularly to the parliament buildings, will prove to be a pleasant and informative experience.



REFERENCE TO REPORT IN THE &quot;CANADIAN


Mr. Daniel Mclvor (Fori William):: Mr. Speaker, on a question of privilege, I regret very much to have to take a Toronto newspaper to task. I have always been taught that if a man hits you on one cheek you should turn the other, but when a newspaper hits you below the belt I think you have a right to stand up and fight. This paper accuses me of using my franking privilege to send out a pamphlet entitled, "Know Your Enemy." I absolutely deny that. Somebody must be using my frank in some illegitimate way, and therefore I say that that is hitting below the belt. They tell me that this pamphlet is anti-Semitic. If the Tribune condemns this pamphlet, then there must be some good in it. The pamphlet was just placed on my table; I looked at it only in a cursory way, but what I saw was good. It may be that I can find another issue of this pamphlet, because if it is as good as the first part then the world should know what the aim of this paper is.
I will not say any more on the matter. I will turn over the matter to the protective staff to find out who has been using my frank, and I will hand this paper to the Minister of Justice for future action.

Inquiries of the Ministry


Mr. Coldwell:: May I say that I also
received this pamphlet, but my copy was in an envelope with no frank and no stamp. I am wondering how it got in my box. It is most objectionable.



LENGTH AND MASS UNITS ACT


Right Hon. C. D. Howe (Minister of Trade and Commerce) moved: for leave to introduce Bill No. 293, respecting units of length and mass.


Mr. Green:: Could we have an explanation?


Mr. G. J. Mcllraith (Parliamentary Assistant to the Minister of Trade and Commerce):: Mr. Speaker, the Weights and Measures Act as passed in 1873 provided that a specified bronze bar would be the primary standard of length in Canada and a specified platinum-iridium weight would be the Canadian standard pound. With the progress of scientific metrology since 1873, it has been found that a more scientifically accurate primary standard can be defined in terms of the international metre. The bill now before the house for first reading therefore defines the primary standards of weight and measure in terms of the international metre and the international kilogram.
Motion agreed to and bill read the first time.


EXTERNAL AFFAIRS
[Stage Direction]
Mr. Rene N. Jutras (for Mr. Bradette) presented the first report of the standing committee on external affairs, and moved that the report be concurred in.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: I
should like to direct a question to the Minister of Public Works. For the visit of the president of France four flags were made and placed in the anteroom of the memorial chamber, and they have since been removed. I ask the Minister of Public Works whether he will give consideration to having them placed there as a permanent memorial of that historic occasion, the visit of the president of France.
[Mr. Mclvor.)


Alphonse Fournier: I will certainly submit that request to my colleagues and do my best to meet the hon. member's wishes.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. Charles Cannon (Iles-de-la-Madeleine):: I should like to direct a question to the Minister of Fisheries. In his statement to the house yesterday the minister said:
It is only under special conditions that government action under the support act should be contemplated. There is, in our opinion, no need for such special action at this time.
Will the minister tell the house whether this statement applies only to the 1951 catch or also to the 1950 catch?


Hon. R. W. Mayhew (Minister of Fisheries):: The hon. member gave me notice of the question. I think it is quite apparent from the statement I made that I was referring to the 1951 catch. We have already given support to the 1950 catch in buying Labrador codfish. We have also agreed to make an investigation of returns to fishermen on shore fish for 1950. That investigation is now proceeding, and it will probably be July before it is finished. We are not going back on anything that we have promised to do. In my statement I was referring only to the 1951 season.



INQUIRY AS TO SITTING ON VICTORIA DAY

[Stage Direction]
On the orders of the day:
Mr. Roberi Fair (Baffle River):: I should like to ask the Prime Minister whether the house will sit on Thursday, May 24.
Right Hon. L. S. St. Laurent (Prime
Minister): The matter has not received any special consideration. In conformity with the practice that has been followed over many years past, I think it would be the desire of hon. members to sit on that day.


Robert Fair: I have no objection whatever to the house sitting. In fact, I should like to do that, but because civil servants across the country will have a holiday on May 24 I should like to know whether consideration will be given to giving the members' stenographers staff Saturday morning off to make up for having to work on Thursday.


Mr. St. Laurent:: The Prime Minister has no control over the stenographic staff of the House of Commons.



WEIGHTS AND MEASURES ACT


[Stage Direction]
On the order:
Second reading of Bill No. 193, an act respecting weights and measures.-The Minister of Trade and Commerce.
George James McIlraith: Mr. Speaker, before the motion for second reading is put I should like to move:
That the order for second reading of Bill No. 193, an act respecting weights and measures, be discharged and the bill withdrawn.
The reason for the motion is that the bill provides for the primary standards of length and weight. Earlier today we introduced a bill providing for those primary standards in another way. The provision therefore will be withdrawn from the Weights and Measures Act. The consequence of the withdrawal of that provision from the weights and measures bill involves some changes in the language of a great many sections as well as one main section. It was considered that it would be fairer to all members that they have before them the weights and measures bill that we are asking the house to consider rather than another bill to which many amendments would have to be made in committee.
Motion agreed to and bill withdrawn.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Beaudoin in the chair.

[Stage Direction]
That it is expedient to introduce a measure to amend the Income Tax Act and to provide, amongst other things:
1.	That, in respect of income earned after the commencement of the 1951 calendar year, a corporation shall pay a defence surtax for the year equal to 20 per cent of that portion of its ordinary income tax for the year that is computed at the 38 per cent rate, or the 33 per cent rate if applicable (before allowance is made for tax credits) subject to a right to a refund of such tax to the extent that it would reduce the corporation's taxable income after payment of ordinary income tax to an amount less than 5 per cent of its capital employed.
2.	That an individual shall pay a defence surtax equal to
(a)	for the 1951 taxation year, 10 per cent and
(b)	for each subsequent taxation year, 20 per cent of his ordinary income tax (including investment surtax) for the year before allowance is made for tax credits.
3.	That, for the purpose of computing income from an office or employment for the 1951 or a subsequent taxation year, there may be deducted certain amounts paid in respect of
(a) travelling expenses that an officer or employee was required by the contract of employment to incur.
Income Tax Act
(b)	professional membership dues where the officer or employee was required by the contract of employment to maintain his professional status,
(c)	office rent or salary to an assistant or substitute required by the contract of employment to be paid by the officer or employee,
(d)	supplies consumed directly in the course of the employment for which the officer or employee was required by the contract of employment to pay, or
(e)	union dues.
4.	That the governor in council be authorized to make regulations under which the income tax of members of the armed forces on their service income will be paid in full in respect of the pay and allowances of each pay period by a deduction therefrom in accordance with a special table subject to the right of any member to file a return on an annual basis.
5.	That the right to elect to pay the 15 per cent tax on its undistributed income now enjoyed by a private company
(a)	be extended to all other corporations, and
(b)	be withdrawn, effective April 10, 1951, from a corporation that is controlled by another corporation except in respect of its undistributed income on hand at the end of the 1949 taxation year.
6.	That for the 1951 and subsequent taxation years the provision under which the 15 per cent tax rate on the first $10,000 of income of a corporation applies to only one of several related corporations be amended so as not to include in the class of related corporations those controlled by persons not dealing at arms length unless such persons own shares in the capital stock of both corporations.
7.	That for the 1951 and subsequent taxation years, payments made for insulin, cortisone, adrenocortico-trophin (ACTH), liver extract injectible for pernicious anaemia and vitamin B12 for pernicious anaemia purchased under a physician's prescription may be included in the medical expenses for which a deduction from income may be made for the purpose of computing taxable income.
8.	That special deductions from income to taxpayers whose principal business is the production, refining or marketing of petroleum or petroleum products or the exploring or drilling for oil or natural gas or mining or exploring for minerals, be allowed for expenses incurred in the 1954 operations on the same basis as for expenses incurred in the operations in the years 1951 to 1953.
9.	That special deductions from income and taxes to taxpayers whose principal business is production, refining or marketing of petroleum or drilling for petroleum be allowed for expenses incurred in respect of deep-test oil wells in 1952 operations on the same basis as for similar expenses in 1950 and
1951	operations.
10.	That the exemption of the income from a metalliferous or industrial mineral mine for the first three years of production now applicable to mines that came into production during the years 1946 to
1952	be extended to mines coming into production in the years 1953 and 1954.
George Alexander Drew: During the discussion of this measure before the committee rose last evening, Mr. Chairman, a good deal was said about the income tax provisions in so far as they affect men and women in our active service forces overseas. A number of hon. members expressed the opinion that members of our active service forces overseas should be exempt from the provisions of the Income

Income Tax Act
Tax Act. In response to these suggestions it was explained that there were certain administrative difficulties; and it will be recalled that when this subject was brought up on an earlier occasion the Minister of National Defence pointed out the difference in dollars and cents that this exemption would result in as between a private in the ranks and a major general. Other considerations also have been put forward.
I suggest there are reasons why the recommendation that members of our armed forces on active service overseas should be exempt from the provisions of the Income Tax Act deserves further and favourable consideration by the Minister of Finance., It is not necessary to repeat the arguments that have been so well presented in favour of this exemption. However, it does seem necessary to refer to the fact that this was done during the last war. It is true there were administrative difficulties, as there would be today; but I submit that it is the duty of the government to decide what should be done and then take such steps as may be necessary to overcome any administrative difficulties.
This is something which particularly requires every effort on the part of the government, at a time when all Canadians are being asked to encourage enlistment in the armed forces. I submit the evidence is very strong that public opinion across Canada is overwhelmingly in favour of the suggestion that those who are offering life itself in the service of their country should be exempt from these taxes during their period of active service.
I recognize that hon. members should not regard as conclusive arguments the editorial point of view which may be expressed in newspapers across this country, important though that may be. But when there is a uniform request for this exemption, in very strong terms, on the editorial pages of the most responsible newspapers of Canada, we should recognize that it interprets public opinion without regard to political or other affiliations. Merely to look at some of the editorials which have taken a very strong stand on this matter one finds such words as "repugnant", "heartless", and terms of that kind used to describe the imposition of income tax on those on active service. I would refer to a statement such as this: "Imagine the public uproar if the defence minister ordered our soldiers in Korea to buy their own bullets". That statement, appearing in the Vancouver Sun, which is ordinarily very friendly to the government, merely indicates the sentiment being expressed from the Atlantic to the Pacific in regard to this tax.
Many anomalies can be suggested which indicate why such a tax would be most unfair. Let us consider, for instance, the case of a man killed in action-and unhappily we must recognize that we are called on to consider such cases; we are reminded of it from day to day by the casualty lists which indicate what Canada is suffering in a war, which is a very real war, being waged by the collective forces of the United Nations. Is the government going to make a claim against the estate of that man for arrears of income tax? Is the government going to pursue the ordinary course in regard to a debt of this kind? I am not raising this question for any other purpose than to illustrate one of the numerous difficulties that would arise and would have to be faced. I should think there would be a great reluctance to follow such a course. I am sure the Minister of Finance, a veteran himself, would be most reluctant to take such action. Then if that course is not right, the initial step should not be taken which would call for such action as an ultimate result.
I notice that a good deal of attention was paid to the fact that exemption from income tax would result in a substantial saving to a major general and a relatively small saving to other ranks. It may well be that there are discrepancies of the kind which require special consideration. I suggest, however, that that is no argument in itself. If it is right that the soldiers, sailors or airmen of the lowest non-commissioned rank should be exempt from this tax, the fact that someone else might be exempt in respect of a larger sum can surely be no conclusive argument against granting what would otherwise be regarded as a just allowance. As I recall the figure, it was estimated that for the lowest non-commissioned ranks the saving would be $6.85 per month. That, after all, does amount to some $80 in a year, which is not an insignificant figure in these days of rising costs of the necessities of life.
May I point out, Mr. Chairman, that on earlier occasions the government did not feel that this principle was so repugnant. It will be recalled that until comparatively recent times diplomatic and other representatives overseas in similar posts were exempted from income tax. As I understand it, that was done in recognition of the fact that those who served Canada outside of the country do not receive many of the conveniences, services, and amenities which are provided from the tax money which is paid. Furthermore, it was also a recognition of the fact that men and women who served Canada overseas are often called upon to bear dual expenses because of the necessity of maintaining a family or home in Canada, and also

other facilities of a similar kind overseas. Evidently the government decided that this was not a satisfactory method. The exemption was discontinued but in its place came the provision of generous living allowances and expense accounts, intended to recognize that in addition to the ordinary cost of carrying out services of that nature outside of Canada, there were also unusual expenses involved. Although the method is different, the government still recognizes that those who serve Canada outside of our national borders are faced with special expenses, quite apart from their daily living, that at least call for recognition. I submit that if it is appropriate that we should recognize our obligation to those who serve us in civilian capacities overseas, we certainly should recognize that same obligation to those who serve us overseas in uniform in a much more dangerous capacity.
Apart from the great danger, apart from the hardship and the separation from their families experienced by those on active service, which they willingly accept in offering their own services to their country, there nevertheless is the fact that those who go on active service outside of Canada in our armed forces do, for a considerable time, remove themselves from the opportunity to make use of the public services, the many public facilities and conveniences, which are available to the rest of us from the money paid in taxes to the government of Canada.
For that reason, in addition to the other reasons which have been so clearly stated, I believe that while men and women are on active service in our armed forces they should not be called upon to pay the full taxes required for all the services that they would ordinarily receive if they were in Canada. I believe the least that can be done for those who are making it possible for us to enjoy these services is to exempt them from those income taxes which bear particularly heavily on those who are receiving armed forces pay.
There are times when the government must follow a course which is not necessarily related to general public opinion if they believe that course to be more convenient and more satisfactory from the administrative point of view. I contend that in this case there are special reasons why the government should be very sensitive to public opinion as it has been expressed by the editorials in our	newspapers-which	often clearly
interpret public thinking-and by veterans organizations, municipal councils and other bodies which have taken a definite stand on this subject. We want everyone to feel that the utmost is being done to encourage young
Income Tax Act
men and women to accept the great responsibility they assume in becoming members of the armed forces of Canada. With the opinion that has been expressed so clearly by these various organizations, by veterans bodies and by the press as interpreters of public opinion, I urge that the Minister of Finance reconsider this particular request and indicate to the house that there will be an exemption from income tax for all members of our armed forces serving overseas.
East night there was some suggestion that this subject should be discussed in detail, and that hon. members of this house should say how this should be done or what alternative should be offered. I would point out, Mr. Chairman, that at this time we are considering a motion which says that it is expedient that certain things be done. As I understand it, the real purpose of the debate on this motion, and other similar motions, is that members of the house may indicate what they think is expedient or is not expedient. Then if their arguments have been sufficiently convincing, the minister responsible for the legislation which will be subsequently introduced has an opportunity to amend it accordingly before it comes into this chamber.
The point I am making, and the point I urge with the utmost earnestness upon the Minister of Finance, is that he should agree that it is not expedient to impose an income tax on those who are assuming the great responsibility of preserving freedom for Canada by taking their place in the armed forces of this country on active service overseas.


Mr. Abbott:: Mr. Chairman, I want to thank the leader of the opposition for the objective way in which he has dealt with this important question. I completely agree with the statement he made, and with the one that was made yesterday evening by the hon. member for Vancouver-Quadra, to the effect that this is not a question which is to be determined on the basis of partisan politics or party interest. It is a question in which we are all interested, and our objective must be to do what is fair and just.
I again agree with my hon. friend that editorial comment does not necessarily indicate what public opinion is, although it is a fair indication of what a great many people feel. It was for that reason that I placed on Hansard yesterday evening a carefully-considered statement as to why I felt that an exemption from income tax for our armed forces was inequitable and unjust. I did not put it on the basis of administrative difficulties. At the end of my remarks, it is true, I referred to administrative difficulties, but

Income Tax Act
I expressly pointed out that this was not the important point, and that I was resting my case on the inequities and injustices created by such a system. As clearly as I could, I dealt with the history and with the reasons why I felt that it was unfair and unjust. I expressed the hope that those veterans who had had personal experience in the last war would give us the benefit of their views. 1 know that some have already done so. But I feel sure that the hon. member for Broadview could do so. He was of course a gallant officer; he had the benefit of these exemptions, and, by reason of the fact that he was an officer and fairly fortunately situated, would have received from that exemption substantial benefit, much greater benefit than the men serving under him. I myself never was in that position, but, speaking personally, I think I would feel uncomfortable.


Some hon. Members:: (5h, oh.


Douglas Charles Abbott: I am being perfectly sincere. It is easy to get cheap applause for urging something of this kind; but I am trying to do what the leader of the opposition did, namely, deal with the matter objectively.
I stated that I thought that blanket exemption for those serving overseas would be unfair. To take the case of the private who is in Korea today, as my hon. friend pointed out, his income tax liability is $6.85 a month if he is single. In the case of officers, of course, it is much higher. As against that he receives a tax-free foreign allowance now of $9 a month, which is in excess of his income tax liability.
The purpose of the resolution which is now before us, or the legislation which will be based upon it, is to provide that, as to service pay and allowances, if a man has no other income his total tax liability will be discharged by a special total deduction and he will not be even obliged to file an income tax return. Therefore the case which my hon. friend mentioned, that of trying to collect income tax from a soldier who had been killed, could not arise under those circumstances. Any liability which might exist would have been discharged as he went along.
After the most careful consideration, I have come to the conclusion which I have indicated, namely that of a blanket exemption for those who are serving overseas creates the most manifest inequities and injustices. It is for that reason that I am strongly opposed to it. I think that recognition of the service offered by our soldiers should take some other form than that of a blanket income tax exemption.

I suppose that one should not always argue by analogy, but I think there must be some reason, which is probably similar to the one I am putting forward now, why a similar practice should have been followed in the British forces and in the American forces. I am aware of the fact that we did it in the last war. Last night I indicated the historic sequence of events, how from time to time we had to amend it, and the difficulties that we got into in doing it. Such a system might create incentive to keep people in the field rather than back at headquarters; but honestly, from the best consideration I have been able to give to it, that is the only justification I can see.
If we look at this thing objectively and dispassionately, and try to disabuse our minds of the admittedly strong emotional appeal of an exemption of this kind, I would hope that we would come to the conclusion that there should not be any over-all blanket exemption such as is suggested, but that such recognition as may be appropriate should take the form, as it does now in the case of other ranks in Korea, of a tax-free foreign allowance. I would hope that those who have had personal experience in the last war-and I did not have it, although I had a bit of experience by being in touch with it through my association with the Department of Finance during that period- would give me the benefit of their views as to how it worked out and whether they honestly, sincerely and conscientiously believe that it was a fair system.


John George Diefenbaker: Will the minister permit
a question before he sits down?


Douglas Charles Abbott: I should be happy to do so.


John George Diefenbaker: The minister mentioned
a blanket exemption.


Douglas Charles Abbott: Yes.


John George Diefenbaker: Is there any reason why there should not be an exemption of those who serve, not in the nature of a blanket exemption but one to cover pay and allowances in the same way that we as members of parliament are exempt to the extent of $2,000?


Douglas Charles Abbott: That is what existed. I am
sorry if I misled by hon. friend.


John George Diefenbaker: The minister mentioned a blanket exemption.


Douglas Charles Abbott: All service pay and allowances were exempt. I can give an example-I will not take anyone in the chamber. There is a friend of mine in Montreal who was in one of the high brackets. I think ninety-six per cent of his top dollar was taken in taxes. His rank

during the war was that of major. The exemption which he got through serving overseas meant that he got virtually his whole pay, whereas if he had not had that exemption, a substantial amount would have been taken in taxes. It is perfectly obvious that a man benefits who either has high service income or high outside income. There is administrative difficulty but I do not consider that the administrative difficulty is the only thing.


John George Diefenbaker: That is the reason the minister gave.


Douglas Charles Abbott: I said that last night. I do not know whether my hon. friend read what I said.


John George Diefenbaker: Yes, I read it. [DOT]


Douglas Charles Abbott: It was a statement that I tried to make as comprehensive as I could. I set out the history in detail. We had fellows flying into an income tax free position and floating into an income tax free position. I would hate to be thrown back into that sort of situation again. I am sure that the committee will appreciate the fact that the revenue implications of this suggestion are relatively negligible.


John George Diefenbaker: That is right.


Douglas Charles Abbott: The suggestion that I have been hinting at, that is, of some form of combat pay or foreign service pay, would probably be considerably more expensive from the point of view of the treasury. But I suggest that it would be infinitely fairer than this haphazard impact of a general exemption of service pay and allowances, either for overseas service or otherwise. It is for that reason that I urge that all members consider this matter carefully. I should like to suggest that we do not attempt to decide it on this resolution. In this resolution I am providing for the authorizing of a simplified form of income tax liability for all service personnel who are serving in Canada or abroad. But that does not preclude another provision to the effect that they shall be entirely exempt.
The consideration I have given to the matter up to the present time will not enable me to conclude that the fair and proper thing to do would be to revert to the practice which we followed in the last war. Now, perhaps views may be put forward which will persuade me that that is wrong. I am not under any illusions as to what the easy course to follow would be. The easy thing to do would be simply to follow the practice which prevailed in the last war. I am sure that hon. members will give me credit for believing that the view which I am putting forward
Income Tax Act
is not with the object of gaining any immediate popularity. While I may be mistaken, it is put forward because I believe it is in the best interests of the servicemen themselves and the taxpayers as a whole.


John George Diefenbaker: Certainly anyone would be impressed by the dispassionate way in which the leader of the opposition and the Minister of Finance have discussed this matter. However, as an example of the unfairness of granting a general blanket exemption the minister mentioned an officer who had a private income. My suggestion to him was that so far as service pay and allowances are concerned, they should be exempt. Certainly there is not much at stake from a monetary standpoint. If the entire force in Korea today were taxed the total amount would not exceed $1 million.
Some time ago the Minister of National Defence gave as his reason why the system that was followed during the last war could not be followed at this time, that a brigadier overseas, with a large income, would be exempt from income tax. That argument is not a very powerful one. The brigadier would pay approximately $120 a month in income tax.


Douglas Charles Abbott: It would be $142.90.


John George Diefenbaker: I was just figuring it out roughly. It is $142.90 for one brigadier. How many colonels are there?


Mr. Fulton:: Four. The colonel's tax is $97.35.


Mr, Diefenbaker:: Well, the number of officers over the rank of lieutenant would not be very large. The position there is that the many who receive the small rate of pay of $2.35 a day, the privates, and beyond that of course the non-commissioned officers, would have to pay tax in order to prevent the senior officers from escaping the payment of tax. Looking at the situation from the broadest standpoint, and aside from any sentimental consideration at all, the people of Canada as a whole ask that this exemption be given. Generally speaking, I think that members in all parts of the house-I know of no exceptions, although there may be some-are in support of the idea, as are the people generally.
I feel that even though the minister has rather categorically closed the door to consideration, the desires of the people of the country as a whole should be effectuated. There may be difficulties in administration.


Douglas Charles Abbott: Not serious.


John George Diefenbaker: Not serious difficulties?


Douglas Charles Abbott: No.
31S4

Income Tax Act


John George Diefenbaker: Then, if there are no serious difficulties in administration-


Douglas Charles Abbott: There are inequities and injustices, not difficulties in administration.


John George Diefenbaker: If there are no difficulties in administration-


Douglas Charles Abbott: No serious difficulties.


John George Diefenbaker: No serious difficulties; I took it from what the Minister of National Defence said the other day that there were, and the only reason is that it might create inequities. If that is so, then I feel that that of itself is not sufficient, because after all, the only reason for objection to inequities is that they are felt by others. I know of no person in this country who would feel it was inequitable to allow those who serve to be exempt from income tax on their pay and allowances

and I refer to those who serve today in Korea.
Members of parliament have an exemption of $2,000 a year. I know there are some who regard that as inequitable, but I know of no one who would say that an exemption to the men who serve in Korea would be inequitable. Let me give you an example. In the Department of External Affairs we have on foreign service many competent officials. They pay income tax on their income, but they do not pay on their allowances. The result has been that in recent years, while the pay has not gone up, the allowances have mounted. I ask any hon. member to look at the record of public accounts for 1950 at page E-20. These allowances are substantial. While I do not suggest to the Secretary of State for External Affairs that the allowances have increased as a form of indirect exemption, the fact remains that they have materially increased in recent years.
I am just reading indiscriminately from these allowances. I am not speaking of the salaries of $16,000 a year and so on. Allowances, $13,092,	$15,366,	$15,000,	$12,192,
$23,592, $13,836, $13,992, $16,092. I pick out the larger ones as well as the smaller ones- $10,092, $12,792, $25,320, $12,552, $14,892, $13,536. The last one on the list is Pakistan, and it is the last one I gave. No one has suggested that these allowances are inequitable. In addition to these allowances the recipients receive removal expenses, travelling expenses and the like. These allowances are given in part because the officer on foreign service, as the leader of the opposition said, does not enjoy the benefits that his taxation would grant to him were he within this country.
I do not want to engage in any sentimental discussion. I went to the reading room about

a week ago and I read the editorial comment across the country, in publications of different political persuasions, and without exception the general demand that was voiced was for the granting of this exemption. For instance, here is what the Windsor Star said in an editorial on May 14:
Making it worse.
The federal government's arguments against income tax exemptions for service men on overseas duty are going from bad to worse.
The latest, offered by Defence Minister Brooke Claxton, is that it's difficult to devise a system of exemptions that would be fair to all concerned. By way of example he said that if the forces overseas were relieved of all income tax liability, a major general would gain $172.30 a month and a first-class private only $6.85.
But a major general is at the divisional command level, and for every officer of that rank there are about 10,000 privates. Does this mean that to keep one major general from saving $172.30 a month in tax, the department is willing to nick the privates for $68,500?
As it happens, we haven't a major general in Korea, nor are we likely to have one there or in Europe for some time. Our highest officer in Korea is a brigadier. Are 6,000 or 7,000 privates to be clipped for $6.85 a month each, therefore, just to keep one brigadier from saving about $120?
Our financial wizards in Ottawa should come down to earth.
That represents the general viewpoint today. The minister has stated that it is not a question of administrative difficulty; it is the inequities or anomalous conditions that would be created. There would be no anomalous condition or inequity created if the pay and allowances were exempted. A person with a private income would make out his income tax return the way we do, and on top of page 2, I think it is, he would show as an exemption his pay and allowances from the armed forces the same way as we show our $2,000 allowance.
The inequity is caused by a few people having the idea that they are being discriminated aganst, that something unfair is being done. I cannot think of anyone in this country who would consider that an inequity was being created by exempting the pay and allowances of those who are serving in the armed forces. I hope the minister will have his officials look into this matter. It is little things like this that, while unimportant-the minister says it is only a matter of $1 million of revenue-undermine morale. It is this kind of thing that causes a feeling of resentment. It is this kind of thing that, as we all know, whether we sit to the right or the left of the Speaker, creates those pinpricks, those difficulties that so often undermine spirit and morale.


Douglas Charles Abbott: As the hon. member suggests, I shall give consideration to all the views that are voiced today. But in order to keep

the record straight I should like to point out that under the Income Tax Act the allowances of our diplomatic officials who are serving abroad are subject to exemption, and the same exemption applies to members of the military or air forces of Canada who are serving abroad and who are receiving allowances.


Mr. Quelch:: Mr. Chairman, we in this group strongly support the suggestion that the pay and allowances of men in the armed services fighting overseas should be exempt from income tax. To my mind there is something revolting about the idea that a man who is fighting for his country and who may be called upon any day to make the supreme sacrifice should also be required to contribute toward the financial cost of the war. Surely his sacrifices should be regarded as full payment on his part toward the cost of the war without his being required to make any other financial contribution.
We must remember that these men when they come back, if they are lucky enough to come back, will be required, by means of taxation in the years to follow, to contribute toward the cost of the war they have fought. Yesterday the minister mentioned the fact that there is no income tax exemption in Great Britain and the United States for men of the armed services. Surely the minister would not say that he supports everything that is done by the governments of Great Britain and the United States?


Douglas Charles Abbott: I do not know of any country where complete exemptions are allowed.


Victor Quelch: The minister must be aware of the fact that in Great Britain and the United States there is compulsory military service. Canada and Iceland are the only two countries that have not compulsory military service. There is a big difference between a country that has compulsory military service and a country that has a voluntary system.
If we had in this country a compulsory system whereby every man would have to go into the armed services at the age of eighteen years, we would be spreading the burden equitably across the whole country. But where you have a voluntary system there is no equality of service and sacrifice. In some cases whole families are wiped out. I know a case in the last war where five or six sons in a family were wiped out. That is not equality of sacrifice. I do not think the minister is making a fair comparison when he compares Canada, where there is voluntary service, with countries having compulsory service.
Income Tax Act


Douglas Charles Abbott: We had compulsory service in the last war.


Victor Quelch: The minister is aware of the fact that it is highly desirable that during his term of service a soldier should save as much money as possible toward the day when he must re-establish himself. The minister knows that the benefits granted by the veterans legislation are not sufficient to reestablish these men. The minister knows also that, judging from what has happened in the past, the veteran is usually discharged in a period of inflation during which he must face the added difficulty of re-establishing himself when prices are high.
While we have the dependents allowance board, many soldiers serving overseas are having to make substantial contributions toward the upkeep of their family made necessary by the high cost of living. Yesterday the minister gave a number of reasons why he thought exemption should not be granted to the members of the armed services.


Douglas Charles Abbott: Is the hon. member advocating a general exemption for members of the armed services, or only for those serving in some foreign theatre?


Victor Quelch: For those serving overseas. The minister referred to senior officers and stated that the benefits they would receive would be so much greater than those received by the men in the ranks. The minister has dealt with that point himself and shown how that difficulty was overcome in the last war. As reported on page 3152 of Hansard of May 17, he said:
Any single member of the armed forces with an income of less than $1,600 was exempt, and married members were exempt at higher amounts. In addition a complicated tax credit formula was employed to gradually increase the tax above those exemptions until the full rate of tax was paid.
We could give the men in the ranks an exemption of $2,000 in the case of single men and $3,000 in the case of married men, and then steeply graduate the income tax above that so that the officers in the higher ranks would be paying the full amount of the tax.
The minister referred also to the difficulty of deciding who would benefit. That is a problem that is faced by the Department of Veterans Affairs in all their legislation. In every act it has been necessary to define just what type of veteran will benefit. For instance, under the War Veterans Allowance Act the beneficiary is the man who saw service in a theatre of real warfare. Under the Veterans Land Act the beneficiary is the man who saw service overseas or who served twelve months in Canada. I presume that if exemptions are granted from income tax the eligibility will have to be defined carefully,

Income Tax Act
but it should not present any greater problem for the minister than has been presented in the veterans legislation.
I should like to say once again that we must realize that the men who are fighting our battles today are paying their full share of the war; therefore it would not be fair to ask them to pay income tax, because in doing so they would be bearing a double share.


Mr. Wright:: On behalf of this group I should like to express our support for the idea that the men serving in Korea should be exempt from income tax. I am pleased that the discussion has been kept on a nonpolitical basis, and that we are discussing the question in a straightforward manner in an effort to find a solution. I am sure that the minister is as anxious as we are on this side of the house to do the best possible. I do not think the administrative difficulty is such that it cannot be overcome.


Douglas Charles Abbott: Not insurmountable. I have said time and time again there is no insurmountable administrative difficulty.


Percy Ellis Wright: Then the only basis on which you can argue that you should continue the tax is that inequities might arise if the tax were not left in effect. I think that can be overcome. It is true that there were many difficulties during the last war when our troops were serving in a great many theatres. There were many different types of cases that had to be dealt with, but at the present time that is not so. We are only fighting in one theatre of war, and it seems to me that the difficulty experienced in the last war would be much less today. If the minister thinks there would be inequities between senior officers and privates at the present time, may I point out that there are very few senior officers involved, and therefore that is not an argument at all.


Douglas Charles Abbott: My hon. friend appreciates what I said, that it is not only the inequity between officer and private but between one soldier and another.


Mr. Wrighi:: If that is the obstacle, then I think the way to avoid it is to give an exemption of $1,000 on the pay of men in combat service overseas. You do that for men over sixty-five years of age. You give them an additional $500 exemption. If an additional exemption of $1,000 were given on the pay and allowances of men in combat service then that would take care of practically all ranks below that of captain. From every point of view that one can look at the matter it seems to me that something should be done at this time. I have read the newspapers, and I have not seen one organization expressing an opinion on this matter that has not
[Mr. Quelch.l
asked the government to give consideration to exempting these men. The minister admits that there are no administrative difficulties.


Douglas Charles Abbott: I did not say there were none. I said there were no insurmountable difficulties.


David McKenzie Wright: No insurmountable difficulties. There have been difficulties in the application of all income taxes ever since 1940 when we started to raise income tax levels. We have had to make amendments to the act to do away with inequities and to make it fairer. Therefore it does not seem to me that is a sound argument at this time. I urge the minister to give serious consideration to granting an exemption of at least $1,000 on the pay of men serving in active combat service for this country at the present time. As the hon member for Lake Centre indicated, it is the little pinpricks that very often carry more weight than something much more important. If it is possible to avoid them I think we should.


Robert Fair: Having brought this matter to the attention of the government on at least three other occasions, I feel compelled to again voice my support at this time because I believe the minister is perhaps softening up somewhat and will make the necessary change to meet the wishes of members of the house.
Paragraph 4 of the resolution reads:
That the governor in council be authorized to make regulations under which the income tax of members of the armed forces on their service income will be paid in full in respect of the pay and allowances of each pay period by a deduction therefrom in accordance with a special table subject to the right of any member to file a return on an annual basis.
Right from the start I have resented the principle of taxing men who are fighting overseas. A reading of this particular section makes me feel all the more resentful of the implications contained therein. The hon. member for Acadia has put the position very well. I feel that by giving single men an exemption of $2,000 and married men an exemption of $3,000 we would get away from quite a few of the inequities involved in this proposition. Last night the Minister of Finance suggested giving additional foreign service pay. In my opinion that is another way of passing the buck to the Minister of National Defence, and if this legislation is passed he will again throw it back to the Minister of Finance. By doing what has been suggested by the hon. member for Acadia, the pay and allowances of those in the higher pay brackets would be adequately taken care of. I think there is something the matter with the principle of this legislation and I should like to see it corrected before it is passed.


Mr. MacDougall:: I had not anticipated participating in this debate, but I feel that the minister has given a very dear-cut statement with respect to the inequalities that would arise from the adoption of the program now being supported by the opposition. I should like to go back to the years of the first world war. As the hon. member for Lake Centre has stated, the pay is now more than 100 per cent greater than what it was from 1914 to 1918.


Edmund Davie Fulton: So is the income tax.


John Lorne MacDougall: It is very difficult for any member of the house to prevent himself from rising to speak on a question which by and large may be viewed at the moment as a popular one to support. It has been stated -and I recognize the truthfulness thereof

 that there has been more or less of an uproar in the editorials of various newspapers across Canada with respect to this particular tax. If we look back I think we will find many instances in the past where for the moment a particular topic was popular with a great number of people, and to get up and kick about it was the popular thing to do. It is very hard for a person to resist doing that at this time. However, I think that we should look at this matter objectively, as the minister has stated. I have talked, as other hon. members have, with a great number of men serving not only in Canada but also in Korea. It has been stated during the debate that at the present time we have no major generals serving in Korea. That is quite true, but we unquestionably have a large and ever-increasing number of higher officers in the service. I do 'not think for a moment those to whom I have spoken would strenuously object to the payment of income tax. When we went overseas in the first world war there was no question of income tax, of course, because it was not in existence then; but neither was there in the minds of any of those who went overseas at that time any question of social security while they were serving or when they returned.
These are matters we should keep in mind. I believe the government made a mistake when they exempted $2,000 of a member's indemnity from the payment of income tax. I believe that, otherwise I would not be on my feet now. As lawmakers for Canada I think we should be taxed on our entire indemnity. Whether or not that indemnity is too low is another question, but I do not believe we should have an exemption, because we set a very poor example to the electorate throughout Canada. There are plenty of people in this country today on fixed incomes who will be in a very poor position to pay the income tax they will be 80709-202
Income Tax Act
charged. It is true that they may not go on active service either now or in the years to come, though there are thousands of such people who are preparing for active service or going on service today, to whom the income tax does not mean tuppence. I believe, and I would be prepared to maintain my stand before the various returned organizations of this country, that these people do not wish any particular preference. They want to serve their country in the way they can serve it best. Fundamentally it is a question of service to the country on the part of those men now in the active services, and the women who will be enlisted under plans which have been announced. They are desirous of giving something to the country, not of getting something from the country. So I sincerely and honestly believe there is not nor will there be any great resentment in the armed services of this country as a result of the imposition of income tax.
The Minister of Finance has stated that there would be no insurmountable difficulties with respect to the administration and collection of that tax. I do not wish to disagree with him, but I think because of his kindliness he may have minimized those potential difficulties as much as possible. We have an increasing number of men serving in various parts of Canada, and who will be serving in Europe and in Korea. We have stepped up our program with respect to technical personnel. We know that plans being followed today may be completely outmoded two or three months from now. As a result we may have large numbers of men being transferred from Korea to Canada or from Canada to the United Kingdom or from the United Kingdom back to Canada. I believe the difficulties that would arise because of that constant shifting of personnel would be very great.
As far as pay is concerned, as I have said the ordinary man in the ranks will never become a millionaire; but the fact remains that he is getting over 100 per cent more than we got in the first world war. I really believe the great majority of those in our armed services today will not resent the imposition of income tax at all. Rather I believe they will welcome it, because they want to see our whole defence program speeded up and they know the money taken from them in that way will increase rather than lessen the ability of this country to give them the necessary equipment in the shortest time possible, so that in the words of Winston Spencer Churchill they may be able to go on and finish the job. I do believe that with respect to this question of income tax we should completely divorce our thoughts from an appeal which may be

Income Tax Act
*popular for the moment. I am sure those in the armed services are not anxious that their stay in foreign lands should be prolonged, and the contributions they make in this way, small though they may be, will give them confidence that they will be able to conduct the war against the present enemy, and against any future enemy, to a successful conclusion so they may return to their homes and loved ones as soon as possible.
The hon. member for Lake Centre quoted a number of figures showing the allowances made to those in the foreign service. I am rather inclined to believe that those allowances may be out of proportion, though I do not know; I have not gone into the question. It seems to me, however, that the soundest way to look at this proposition is to realize that whatever our contribution may be by way of taxes, that money is going to assure victory and peace; to think of what we as Canadians are going to have after the money has been spent, and what would be our situation if the money to carry forward our preparedness program was not forthcoming. The alternative could quite easily be defeat. I cannot help but think of the words of the president of France who honoured us with a visit not long ago, and who said it was not so much a matter of the cost as long as the result was peace. I believe those words would be repeated by thousands of our fighting men, no matter where they are. The things they want are the tools of war. They want the war prosecuted with thoroughness and effectiveness. They want to have the most modern arms and equipment. It is our duty as legislators of the Dominion of Canada, Mr. Chairman, to keep our eye constantly fixed on the goal, and to see that these men are given just that. We can best do it by the quickest consummation of our whole program with respect to taxation, and our program to prevent aggression, in order that victory may result and peace be assured.


Mr. Gillis:: Mr. Chairman, while listening to the last speaker I felt sorry that he had not paid some attention to the tone set by the Minister of Finance in this debate. The minister correctly said that this is not a political issue. This is a matter in which all members of this house are equally concerned, and for which they are trying to find a solution in the best interests of the men about whom we are speaking. The hon. member for Vancouver -Burrard certainly got away from that. His case was very weak. He took the advice I have heard given by some of the ministers of the church here: when your case is weak holler very loud. He did not have much of a case, and I am sure everyone could hear him.
{Mr. MacDougall.]
This is not a popular issue, but is an honest endeavour by everyone who has spoken to find the best solution. I do not think the hon. member contributed very much towards the solution.
I listened to the minister's statement, and then I read it over very carefully. I agree with most of what he said He definitely came to the committee and said: this is a problem; I do not think I have the solution. He posed the problem for us. Solutions have been offered, and I think some of them are workable. I agree with the minister that a blanket exemption is not the thing. I believe that the method, which would cause the least. administrative difficulty, and which would relieve the people we are thinking about, is to grant another $1,000 exemption. The hon. member said that the $6.85 received by a private who is sleeping in a foxhole in Korea would buy a lot of equipment for him, but that does not mean very much to the private.


John Lorne MacDougall: Will the hon. member repeat that? I did not hear it.


Clarence Gillis: To the private soldier this $6.85 is a lot of money. It represents a lot of beer.
I know it means a lot to the private, because I have gone through the experience. When you go into a canteen without that $6.85 it is not so nice. That is the fellow I am concerned about, the fellow getting the $6.85 monthly tax. I should like the minister to consider granting another $1,000 exemption which would take most of these people we are worrying about out of the tax brackets altogether. Everyone concerned would get relief to the extent of the extra $1,000 exemption. The brigadier and the lower ranking officers would' get that bit of relief, and they would be grateful for it. The department would not lose very much in taxes from the top group, but it would completely relieve those in the lower brackets; that is the $6.85 tax a month chaps, the men who do most of the fighting. The other fellow just directs it. I believe this extra $1,000 exemption would get us over the difficulty.
I do not believe -combat pay is the answer.
I think that is an excuse which has been set up. This combat pay arrangement creates more administrative difficulties. You have to have an extra staff to decide who is a combat soldier and who is not, who should receive the exemption. Then, the department takes it back in taxes. There is no doubt in my mind that the tax department will find a way of getting back that combat pay. I am not saying the minister will do that, but there are people behind him who are rather adept at getting back as much as possible. I do not feel combat pay is the

answer. I believe it creates a lot of administrative headaches. Now we know who are in Korea, and we have them on the tax rolls. We could do as we have already done on two occasions. I want the member for Vancouver-Burrard to note this carefully. A tax exemption was granted to corporations under $10,000 ip that the surcharge did not apply, and then there was a special exemption of $500 for men over sixty-five years of age. This exemption business is not new. It would foe a simple matter to write in that additional exemption of $1,000, and in my opinion it will take care of the problem.
The hon. member made another point that is not germane to this discussion at all. I do not know why he dragged it in, but he mentioned the $2,000 exemption granted to members. Anyone in this house who feels that he cannot use that or who feels he is doing anyone an injustice by getting it, can return it or can declare it as taxable income. He can pay taxes on it. Sometime someone is going to raise that question in this house and give it a real analysis. I consider that the members of parliament who sat here all during the war-many of them lost a lot of money-were the greatest suckers in Canada. They fought for everybody in the country. Everyone got tax relief for the amount of money he spent in earning his income, that is everyone except members of parliament. A lot of members went into debt to the extent of $2,000 or $3,000 a year in order to stay here. I have never felt a bit reluctant about taking it. I considered I was entitled to it. Sometime this question has to be opened up, but I have not any intention of doing so now. I would suggest that any hon, member of this house who feels as the member for Vancouver-Burrard indicated, that it is a wrong thing to do, should return the money or pay taxes on it.


John Lorne MacDougall: On a question of privilege, Mr. Chairman, I did not say anything of the kind. The hon. member is misinterpreting what I said. I did say this, and I maintain it, that as legislators of the Dominion of Canada we should not be the ones to place exemptions on our own salaries. I did not say that we are not entitled to it. I believe we are entitled to that and more. .


Clarence Gillis: I am not going to argue with the hon. member, but I am glad he came around to my way of thinking.


Douglas Charles Abbott: We are going to forget the soldiers pretty soon.


Clarence Gillis: I should like to leave the idea of that $1,000 exemption with the minister. Will the minister say whether the soldier in the field receives a living allowance-I think 80709-202J
Income Tax Act
it amounted to $1.37 in the last war and was called a field allowance-and is that allowance included in his income for tax purposes?


Douglas Charles Abbott: I do not know about field allowances. I am told that a married man receives what is known as a separation allowance if he is serving away from home. That is tax exempt. This foreign allowance to which I referred a bit earlier, which in the case of a private is $9, is also exempt. I know that these two are exempt, but whether or not there are other allowances I do not know. In the case of a man in the ranks it is $39, plus $15 for children. I am told that as much ,as $87 is paid in the case of a lieutenant general.


Edmund Davie Fulton: I think what the hon. member for Cape Breton South had in mind was as to what was reckoned as the equivalent of meals and quarters which serving personnel would receive-I think that was calculated at something like $1.37 a day-or whether, as to those who pay tax in Canada on pay and allowances, their income from the services was reckoned including that amount which they were calculated to receive for meals and quarters, and that their total income was assessed on that basis. The question asked by the hon. member for Cape Breton South is whether the income of those who pay income tax today is calculated by including the value of their meals and quarters.


Douglas Charles Abbott: I am afraid I am not too familiar with the present-day scale of pay and allowances; but I am informed that for the purpose of computing income tax, pay and allowances consist of basic pay of rank for officers, plus two-thirds of the allowances for rations and quarters. Then there is separation allowance when they are serving away from their families which is tax-exempt. But I will inform myself a little more fully as to the allowances.


Mr. Gibson:: I should like to express to the minister for what it is worth my own personal comment. I think that the hon. member for Cape Breton South, when he was speaking, stated the problem well, and I must congratulate him on the way he did it. I am glad to see the attitude taken by the minister, by the leader of the opposition as well as by all those who have spoken in this debate. They have kept the discussion on a high, non-political plane. I would certainly hope that the minister would give the matter his consideration, and I know he will. I .should like to see this $1,000 exemption taken into consideration.


Major James William Coldwell: Should the item not stand,. Mr. Chairman?


J170 HOUSE OF COMMONS
[Stage Direction]
Income Tax Act
Douglas Charles Abbott: No. Perhaps I might say at this point that I am glad to have had this discussion, and I am glad to have the views of all hon. members on this question. As I said at the beginning-and as others have said-I feel strongly, as I know we all do, that this matter should not be treated on the basis of party politics at all. I hope it will be settled on the basis of what is right and fair and not on the basis of emotion or sentiment. That is what I have been striving for, and I am sure that is what all bon. members have been striving for. I am sorry that so far most if not all *of those who have spoken have been my fellow veterans of the first world war when we did not have any income tax problems. In considering the matter, I think we should project our minds a bit farther forward than Korea, as indicated by the hon. member for Melfort, because it is anticipated that we shall have troops serving in Europe as part of the integrated force; and I think we should give consideration to what may be the situation there.
As I have tried to indicate, this is far from being a simple problem. I too was impressed and interested in the suggestion made by the hon. member for Cape Breton South; and I am quite prepared to study that suggestion and all suggestions that have been made. I want to emphasize again the fact that this is not a matter of fundamental government policy. We want to do what is the right thing here, and what the members of the House of Commons, representing the Canadian people, want. But I want to be sure that there is full and adequate discussion of all sides of the thing so that, so far as possible, we do the right thing. I do not believe that what we did in the last. war was the right thing; and that is the only reason that I have been attempting to put forward the suggestions which I have been putting forward.
If this meets with the approval of the *committee, I would hope that we would pass this resolution as it stands. We have to bring in a bill. I shall be glad if any others who have views to express will voice them. We have not as large an attendance here this afternoon as we sometimes have. There may be others whose views on this question would be valuable. I should like to get the bill distributed and made available to members. But I am quite prepared to give an undertaking that if we come to the conclusion that some change is desirable, it can be made of course when we have under consideration the section of the bill relating to service pay. I think that is the practical way to deal with the matter.
I am quite sincere when I say that I am anxious to get just as many points of view
[Mr. Coldwell.l
on this thing as possible. It may be that a suggestion of some additional exemption, such as that made by the hon. member for Cape Breton South, would overcome the difficulties in the putting in of a system of combat pay or foreign service pay. I should like to discuss that matter with my officials and with the service authorities, and see what the implications would be, before I attempt to take any firm decision on it. But that is my position. I want to do what is fair and just for the service personnel, and for the people of Canada as a whole. By the necessary discussion here, I think we can probably arrive at what that policy should be. But I deeply appreciate the tone that the debate has taken this afternoon. There has been nothing controversial in it, in the sense of party controversy; and I know that we can keep the discussion on that basis.


Edmund Davie Fulton: Just in case the minister should attach any significance to what he pointed out as being the lack of expression of views by veterans-


Douglas Charles Abbott: No, I did not.


Edmund Davie Fulton: -may I say that I should have been glad to express my views, but I did not want to prolong the discussion because I am certainly in general support of the proposition put forward.


Douglas Charles Abbott: We old soldiers have been doing a good deal of talking but have not had much experience with this.


Mr. Ferrie:: I should like to say a few words with regard to this assessment, as you would call it, or the amount that a veteran will be assessed on. I agree that another $1,000 exemption would, to some extent, work all right. But on the other hand, why not take from him the assessment that you have made with regard to his board and his lodging? If you do that, then you take away practically the whole assessment from the Tommy himself; and he is the man who is earning $2.35 a day and his keep. Why add anything for his keep? Canada has guaranteed to keep him. If you take away that board and lodging, as you put it, when they are out by themselves, or if you exempt that, then the Tommy would not pay any income tax at all.


Douglas Charles Abbott: I will give consideration to that suggestion.


Mr. Herridge:: As one who is greatly interested in this question, I have been interested in this non-partisan debate this afternoon. I heartily support the proposals made with respect to further exemptions. I greatly appreciate the spirit in which the minister has accepted the proposals made from this side of the house.


Douglas Charles Abbott: Thank you.


Mr. Goode:: Before this discussion terminates, inasmuch as the minister has invited comments from the veterans of the last war, I think perhaps I could really express the view of some of the officers on both sides of the house, because I served in the barrack room up till towards the end of the war when I became a W.O. and perhaps heard what the officers were thinking about income tax. I give this suggestion to the minister. He has been good in this debate. He has given us an opportunity to speak. In fact, he has invited comment on this matter. I may tell him that the effect of this $6.85 on the morale of the barrack room will be most serious. That seems to me to be the important point, not whether a private soldier, or sergeant or W.O. should pay $6.85 or whatever the amount is. There is this fact to be considered. When you are sitting in a room or tent or hole, sometime you are going to start discussing this matter with someone else; and in the barrack room-as these things always are-the thing becomes magnified until you come to the end of the month and then the boys are all dissatisfied. That is not the way to do it. It is not just a matter of $6.85. It is a matter of morale. Do not charge those fellows $6.85 a month for income tax. You cannot do that and at the same time maintain morale; because some barrack room lawyer, talking to a bunch of privates during the week, is going to kick this thing in the face and you are going to have a lot of trouble. That is the important point, to my mind; not whether a private soldier has to pay tax, but whether he should pay it on the basis of morale. As I got up in the army a little bit I found out what officers think about income tax. I never did have much respect for second lieutenants and lieutenants, but so far as the ranks above that are concerned, I think they could well afford to pay their income tax. I am thinking of the lower ranks, and while, as the minister mentioned the other night, the W.O. I and W.O. II would not want to go up into commissioned rank, because of the payment of the tax, I have yet to see the W.O. who would not take a commission, especially in the army, even though he had to pay income tax.


Douglas Charles Abbott: Even though it would cost him $200?


Tom Goode: If they had offered me one in the army I would have taken it and paid income tax. I would suggest that whatever steps you have to take to ensure no income tax payment you should do it. I do not know whether you can or not, but in the interests
Income Tax Act
of morale this $6.85 should not be taken from the non-commissioned ranks or the private soldier.


[Stage Direction]
Paragraph agreed to.
5. That the right to elect to pay the 15 per cent tax on its undistributed income now enjoyed by a private company
(a)	be extended to all other corporations, and
(b)	be withdrawn, effective April 10, 1951, from a corporation that is controlled by another corporation except in respect of its undistributed income on hand at the end of the 1949 taxation year.
Edmund Davie Fulton: Can the minister say whether it is possible to make this applicable to a corporation which had more than 75 shareholders, and which has gone into voluntary liquidation, and therefore was not qualified previously? Will that corporation be permitted to make distribution?


Douglas Charles Abbott: Does my hon. friend know whether distribution has actually been made or not?


Edmund Davie Fulton: Only partial distribution.


Douglas Charles Abbott: Well, my hon friend is a
prominent lawyer and knows that a corporation in liquidation retains its corporate status until the liquidation has been completed. I hesitate to give a legal opinion off the cuff -I am a little out of practice-but for what it may be worth I would think that, to the extent that profits were still undistributed, advantage could be taken of the amendment


Edmund Davie Fulton: That is-


Douglas Charles Abbott: I do not guarantee the opinion; I am just giving it offhand.


Edmund Davie Fulton: I wish the minister would ask his deputies to look into it to see if it will apply, because it does seem to me it would be unfair otherwise to put it in that way and not allow a corporation in the position in which it has undistributed income on hand to take advantage of this amendment. I 'can appreciate that there might be insuperable-administration difficulties in applying it to-that portion which has been distributed, but the legislation should be drafted to apply to. the undistributed portion.


Douglas Charles Abbott: Again with the necessary
reservations, I do not believe there is any question as to undistributed income still on hand. I think advantage could be taken of this legislation.


Major James William Coldwell: I do not want to renew a discussion which was more or less closed last night, but I was not satisfied last evening with the minister's comparison between our method of taxation of corporations and those of the United Kingdom. I am no more interested in what is going on there than in the United States or elsewhere. I am not an expert regarding taxation, but I tried to

Income Tax Act
get some information on this problem, and all I am doing this afternoon is to suggest to the minister in a brief, simple way just what I am informed is the type of legislation and methods of assessment for income tax on corporations in the two countries. Often this and similar matters are raised in this house either by ourselves or by somebody else. Last night I said, as reported at page 3148 of Hansard:
The nation imposes an income tax of 9 shillings in the pound on what is left after the profits, taxes and the depreciation allowances have been deducted.
The minister said:
The taxpayer takes credit for that.
I have here tan extract from an official statement, and I shall read into the record from it. This is what it says:
After the depreciation allowance is deducted from the gross profit, the net profit is left to the corporation. The corporation then decides how much of its net profit it will distribute and how much it will retain. The net profit is then taxed in the following ways:
First, the nation takes 50 per cent of the profits which are to be distributed in dividends. Second, the nation takes 10 per cent of the amount which is to be put to reserve. Third, the nation takes, through income tax at 9s. 6d. in the pound, nearly half of what is left after the profits taxes and the depreciation allowance have been deducted. This is paid by the corporation. Fourth, the nation takes another 9s. 6d. in the pound income tax from the personal incomes of the shareholders as well as extra sums from those whose incomes are liable to surtax.


Douglas Charles Abbott: That is right.


Major James William Coldwell: Reading that in conjunction with-


Douglas Charles Abbott: Does my hon. friend want to complete that and add that in regard to the 9s. 6d. which is taken from the individual shareholder he can take credit for that on the amount which his company has paid out.


Major James William Coldwell: That is the point I want to raise.


Douglas Charles Abbott: That is the English system, and always has been.


Major James William Coldwell: Now, as I say, I tried to make some inquiries regarding that, and my understanding is that the deductions which the minister said were allowed under the paragraph I have just read, and to which I have referred, refer-


Douglas Charles Abbott: Which deduction is that?


Major James William Coldwell: The last 9s. 6d.


Douglas Charles Abbott: Yes.


Major James William Coldwell: It refers to the 50 per
cent tax that has already been-


Douglas Charles Abbott: No.


Major James William Coldwell: -paid by the corporations.


Douglas Charles Abbott: No; I had no relation to that at all.


Major James William Coldwell: As set forth in part I; no, I am saying that is my understanding. The third point was:
The nation takes, through income tax at 9s. 6d. in the pound, nearly half of what is left after the profits taxes and the depreciation allowance have been deducted. This is paid by the corporation.
That is the one which the minister said the taxpayer subsequently takes credit for. My information is that the levy of 9s. 6d. in the pound is distinct and separate from the other 9s. 6d. and surtax, if any, payable by the individual taxpayer and in effect the allowance to the taxpayer is in connection with the 50 per cent of the profit distributed in dividend. That is the information I have.


Douglas Charles Abbott: My hon. friend is completely
misinformed on that.


Major James William Coldwell: Coming to that point, in his budget speech of last year Sir Stafford Cripps made this statement:
Some 55 per cent of all company profits are required for taxation; probably not less than half of what is left is used for new capital expenditure in one way or another; so that some three-quarters of the gross profits is already being utilized for essential economic purposes which otherwise we should have to finance in some other way: only a quarter goes to personal consumption, and even some of that may be subject to surtax.
That I believe was the amount of the corporation tax in Great Britain in 1950 and it is higher now. It works something like this.


Douglas Charles Abbott: Will my hon. friend allow
me? The income tax in Great Britain, and how it is levied, are a matter of fact. It is not a matter of opinion, it is a matter of fact and well known.


Major James William Coldwell: That is what I put on the
record. I iput the fact, an authoritative statement, on the record.


Douglas Charles Abbott: I do not know who the
author of your authoritative statement is, but the man in front of me is one of the greatest tax experts in this or in other countries.


Major James William Coldwell: 
Douglas Charles Abbott: 
John Lambert Gibson: Is it not true that there are some instances where the corporation and income tax amounts to more than 100 per cent?


Douglas Charles Abbott: It so happens that with the 20 per cent surcharge we have imposed on personal incomes the rate of tax on the last dollar can be 100-8 per cent.


John Lambert Gibson: Does that suit the C.C.F.?


Mr. Thatcher:: There are a couple of questions I should like to ask. I wonder if the minister could tell us the revenue that he got in the past year from this tax and also the reasons for making these changes?


Douglas Charles Abbott: I think the information to answer my hon. friend's first question is contained in the white paper, but the revenue was roughly $91 million. The reason for making the change is this: This was a new departure last year and we were not sure what the result might be in the case of publicly owned companies. If I remember correctly I think I indicated in the house that I was afraid that the announcement of this policy might result in some sort of market activity in the shares of publicly listed companies. As a result of the experience over the last year it has become clear to us that there is no reason for abuse. There are a good many closely held companies which nevertheless have shareholders in excess of 75 and it was thought to be eminently desirable to extend it to all classes of company and not make any distinction.


Edmund Davie Fulton: May I ask the reason for withdrawing the privilege or right from corporations that are controlled by other corporations?


Douglas Charles Abbott: This change is necessary
because a controlled corporation which has qualified for the special treatment of its earnings after 1949 may pay half its earnings out in dividends to its parent corporation free of tax and capitalize the portion remaining after payment of the 15 per cent in tax. If the parent corporation is in turn a controlled corporation it may pay out half the inoome so received in dividends to its parent free of tax and capitalize the portion remaining after paying 15 per cent in tax. This

Income Tax Act
process could continue through a chain of corporations with the result that a substantial part of the earnings of the original corporation would be capitalized and bear only a 15 per cent tax instead of the tax they would have borne if received by individual shareholders as ordinary dividends. There were possible loopholes which we felt should be plugged.


Edmund Davie Fulton: Did you find that you were losing revenue?


Douglas Charles Abbott: We had inquiries which led us to suspect that someone might try it.


Mr. Adamson:: The system of double taxation which we have in Canada is most unfortunate, to say the least, but it has been incorporated into our tax laws for a number of years and I do not suppose there is a great deal we can do about it. When does the cumulative tax on corporations in Canada increase over the cumulative tax on corporations in England? In other words, in England you have a 50 per cent tax, plus a five per cent tax-


Douglas Charles Abbott: A 50 per cent tax on distributed and 10 per cent on undistributed.


Agar Rodney Adamson: Then in Canada you have a tax of 40 per cent.


Douglas Charles Abbott: Forty-five per cent.


Agar Rodney Adamson: A 45 per cent tax on total profits.


Douglas Charles Abbott: That is federal.


Agar Rodney Adamson: Then on top of that the shareholder must pay income tax on the dividends he gets from the corporation.


Douglas Charles Abbott: Right.


Agar Rodney Adamson: At what income does the
individual shareholder actually pay more? In other words, at what point does the government in Canada actually take more of the corporation profits than they do in England? There must be a point. Obviously at some point the government takes 100-8 per cent of the earnings of the company. There must be a point, and I think it would be interesting to the committee to know whether Canadian taxation is higher than United Kingdom taxation.


Douglas Charles Abbott: I will have to study my hon. friend's question and see what answer I can give him. What I meant by the 100-8 per cent was that the highest bracket of the personal income tax now is 96 per cent plus a 4 per cent investment income surcharge. It is 20 per cent of 4 per cent. In effect if you are one of those relatively few fortunate individuals who have an income of $400,000 or more, on the income in excess

of $400,000 you would pay out more than you received so that it would pay you to convert your securities into cash and not attempt to earn anything on them. That is why I indicated that in the revision of the rate schedule some consideration would have to be given to that fact. It illustrates the impact of horizontal surcharges in certain instances.


Mr. Knowles:: To what base is that 4 per
cent surcharge applied?


Agar Rodney Adamson: I should like to know somebody in that class.


Douglas Charles Abbott: It is on the investment
income. Income in excess of a certain figure is taken to be investment income.


Edmund Davie Fulton: $1,800.


Douglas Charles Abbott: And the 20 per cent surcharge of course is on the 4 per cent as well as on the 96 per cent.


Agar Rodney Adamson: I wish I knew somebody
like that. I should like to shake his hand to see what it felt like. What I think the committee would be interested in knowing is whether the tax levied on corporation profits in Canada, the total taxes levied against the corporation and against the individual taxpayer, is actually higher than the same tax levied in the United Kingdom. In fact the taxes extracted from industry in Canada are enormously high despite the lesser schedules we have for individual income tax in Canada simply because of our double taxation.


Douglas Charles Abbott: Of course to answer my hon. friend's question you would have to know the income bracket in which the individual recipient of the dividend happened to be, and what his other income was in order to compare it with the English company. You would have to know what proportion of its income was being distributed and what was being retained because there is a different rate for the two. However, speaking broadly, I think it is fair to say that corporation profits as such are taxed more highly in Canada and the United States than they are in the United Kingdom.


Agar Rodney Adamson: That is the admission I wanted the minister to make, and I am delighted to have it.


[Stage Direction]
Paragraph agreed to.
6.	That for the 1951 and subsequent taxation years the provision under which the 15 per cent tax rate on the first $10,000 of income of a corporation applies to only one of several related corporations be amended so as not to include in the class of related corporations those controlled by persons not dealing at arms length unless such persons own shares in the capital stock of both corporations.
Edmund Davie Fulton: Mr. Chairman-


Douglas Charles Abbott: Before my hon. friend makes his remarks, I should say that I have an amendment to correct a clerical error. The figure "1951" in line 1 should be "1949". I will ask one of my colleagues to move as follows:
That clause 6 of the income tax resolution be amended by substituting the figure 1949 for the figure 1951 in line 1.
It is purely a clerical error.


Alphonse Fournier: I so move.


Wilbert Ross Thatcher: Would the minister explain the significance of this?


Douglas Charles Abbott: This is the section relating to related companies. The law now provides that only one of a group of related corporations may receive the benefit of the lower rate of 15 per cent on the first $10,000 of income. Corporations are considered to be related if 70 per cent or more of the common shares of each of them are owned by one person, or a group of persons, or by persons not dealing with each other at arm's length. By definition persons are not dealing with each other at arm's length if connected by blood relationship, marriage or adoption. As a result, under the law as it now stands a corporation owned by one brother in Montreal and a corporation owned by another brother in Vancouver have been considered to be related although they may each be carrying on an entirely different line of business and be separate in every way. It is proposed to relieve this situation by providing that corporations controlled by persons not dealing at arm's length be not considered as related unless one of the persons owns shares in the capital stock of both corporations.


Edmund Davie Fulton: As it appears from a first reading of this paragraph, one would think that possibly the definition of related corporations was going to be made to depend upon the question of whether or not the same person owned shares in both companies. That is what it looks like here, and there is a question I should like to ask. Is there going to be any change in the definition so that if a person happens to own shares in both companies it will then make them related corporations as the result of the wording in this resolution?


Douglas Charles Abbott: A person is not dealing at arm's length in that circumstance. We had a number of cases brought to our attention. I cited the example of the two brothers. I had one case brought to my attention of two brothers-and sometimes this happens in families-who were not even speaking to each other and had not for years. They were 80709-203
Income Tax Act
both in business with their own corporations. Under the definition contained in the act they were related corporations, and only one of them could get the benefit of the $10,000 exemption. Needless to say there was considerable difficulty in arriving at a decision as to who would get the benefit of the exemption. That was not the sort of thing that the law was intended to prevent. It is obvious that the restrictions are intended to prevent people splitting up larger businesses in order to get the benefit of the lower exemption. I think we have progressively improved the definition. This represents the result of a good deal of consideration and, I think, achieves an equitable result without involving any risk of tax evasion.


Edmund Davie Fulton: Let me put the question I have for the minister by way of an example. The last three lines of the resolution read:
. . . so as not to include in the class of related corporations those controlled by persons not dealing at arm's length unless such persons own shares in the capital stock of both corporations.
At first it would seem that might widen the relationship as to when they would not be deemed to be related. However, let us take two companies that are not doing the same type of business but Mr. X happens to own one share in each corporation. Here you have a case of a person who owns a share of the capital stock of both corporations. The point I am worried about is whether it is going to be the result of this resolution that that fact will make them related corporations.


Douglas Charles Abbott: I am not sure that I have followed my hon. friend quite as well as I should, but at present persons are deemed to be not dealing at arm's length if they are, as I said, connected by blood relationship, marriage or adoption. That excludes members who bear that relationship to each other. It excludes corporations in which those persons may be interested, and all of them. Therefore only one corporation owned by that family group would be eligible for exemption. As a result of the proposed amendment, if one brother owns all the shares in one company, another brother owns all the shares in another, the father owns the shares in a third, a sister owns the shares in a fourth, and another brother owns the shares in a fifth, they can all be considered as independent companies for the purpose of the $10,000 exemption provided none of them has any shares in any of the others. Have I made that clear?


Edmund Davie Fulton: Then the other factor to determine whether the companies are related will be that one person must still own more than 70 per cent of the shares?

Income Tax Act


Douglas Charles Abbott: That is correct.


Edmund Davie Fulton: That still stands?


Douglas Charles Abbott: That is correct. It is a little complicated, I know.


George Alexander Drew: As I understand it this expression ol not being at arm's length is simply an acceptance of the proposition that where there is a member of the family in the other company there is a presumption that there is naturally some association because of that fact.


Douglas Charles Abbott: That is exactly the position.


[Stage Direction]
Amendment agreed to.
Paragraph as amended agreed to.
7.	That for the 1951 and subsequent taxation years, payments made for insulin, cortisone, adrenocorti-cotrophin (ACTH), liver extract injeetible for pernicious anaemia and vitamin B12 for pernicious anaemia purchased under a physician's prescription may be included in the medical expenses for which a deduction from income may be made for the purpose of computing taxable income.
Mr. Applewhaite:: I should like to try to make a point on this paragraph. Because of the evident desire of the committee to pass this resolution before six o'clock I would ask the minister to accept as read the deserved compliments on this extension. My point is that I understand the section being amended had as its original intention the protection of the taxpayer against being crippled financially owing to unexpected medical expenses. These medical expenses are quite closely restricted, whether by statute or by regulation I am not too sure. The point I tried to make a year ago and which I shall try to make again is that in some parts of this country, where people live at great distances from medical attention or hospitals, often the actual incidental expenses necessary to obtain medioal attention are much higher in proportion than the medical expenses themselves. People mdy live where it would cost them $100, $200, $300 or more to make the return trip to obtain necessary medical attention, while on the other hand if they were able to get that attention quickly the cost of the medical service might be only one-sixth that amount.
It seems to me, therefore, an injustice that these people can get no credit as far as income tax goes for the amounts necessarily expended in order to obtain needed medical attention. I do not know whether this appeal should be addressed to the Minister of Finance or the Department of National Revenue. I will admit that there would be some difficulties in applying the principle which I am requesting. I will admit also that conceivably there might be cases where people desiring

to go to the nearest city might try to take advantage of such a provision to finance their trip, though of course such people are not to be found in the riding of Skeena. So, if it cannot be done in connection with this year's budget, I would ask the minister once again to look into the possibility of giving a fair measure of relief to those people who must expend hundreds of dollars for medical attention, even though the whole expenditure is not made to a doctor or a hospital, but part of it is necessary in order to get to where treatment may be obtained.


Stanley Howard Knowles: Like the hon. menjber for Skeena I heartily welcome the terms of the paragraph now before us. Also, I should like to add my word of support to the very reasonable request the hon. member for Skeena has made.
My main reason for rising just now is to express the hope that the minister will give further consideration to the whole question of the 4 per cent clause in respect of the exemption for medical expenses. I need not go into this matter at length, since I did just that on April 17 in a speech the minister can read at pages 2131 to 2138 of Hansard. The point I sought to make on that occasion was that medical expenses which are involuntary, and which often impose very heavy burdens, should get at least the same consideration as charitable contributions, which are voluntary. In the course of that speech I gave examples showing the tax relief to persons with certain incomes if they were faced with medical expenses, compared with the much larger tax relief they would get if they made charitable donations. I pointed out then that I do not disagree with the exemptions that are allowed for donations to approved charitable organizations, but it does seem to me the whole principle underlying this medical exemption requires that the government go a step further and put it on the same basis that is accorded to charitable donations.
I remind the minister that when this provision was first introduced the exemption applied only to medical expenses in excess of five per cent of one's net income. In those days we made pleas of this kind, and in due course Mr. Ilsley met us to the extent of reducing the figure from 5 per cent to 4 per cent; and that change was welcomed. I feel, however, the time has come to wipe out that figure altogether and allow all bona fide medical expenses as an exemption from net income before the tax is computed. The point raised by the hon. member for Skeena emphasizes the fact that many other items enter into the cost of sickness than those allowed by the statute. In the speech to

which I referred, on April 17, I indicated some of those, and I need not repeat them now. I recognize that you cannot by statute include everything every person might say was part of the cost of sickness. Therefore it seems to me the government should help to meet the problem to the extent I have suggested by wiping out the 4 per cent figure and allowing all bona fide medical expenses to be deducted from the net income before the tax is computed.
Coming back to the specific subject of the paragraph before us, I am sure everyone in the house welcomes this decision to include a number of these expensive and important drugs as items that may be included in medical expenses. There are others some of us think should be included as well, but my study of the problem leads me to feel that the question I raised is even more important, namely that the 4 per cent level should be wiped out. I know from the interest the minister is showing in what I say that he has studied this matter. I dare to hope he read my speech-


Douglas Charles Abbott: I did.


Stanley Howard Knowles: -and I would be interested to hear his comments.


Douglas Charles Abbott: I think I shall have to restrict myself at the moment to saying I shall give further consideration to" my hon. friend's representations. One advantage of doing that is that I seem to have to open up this section every year; and with the persistence for which the hon. member is so justly noted I am quite sure he will keep this subject alive until possibly something further is done.


Stanley Howard Knowles: I will.


Mr. Low:: I wonder if the minister would answer this question with respect to the procedure to be followed. Under the regulations as they have existed up to the present time I understand that when such drugs as cortisone, ACTH and these others were purchased, they had to be obtained through a hospital or from a doctor before the purchaser was entitled to the exemption. Will that still be necessary?


Douglas Charles Abbott: No, they can purchase them from a drug store on a prescription.


Solon Earl Low: That is fine. I just wanted to
get that.


Mr. Higgins:: I only want to say, Mr. Chairman, that I endorse the remarks of the hon. member for Winnipeg North Centre and the hon, member for Skeena. I wish to ask the minister whether at present streptomycin, penicillin and other antibiotics are included in these medical deductions?
80709-203i
Income Tax Act


Douglas Charles Abbott: None of those are included,
although if they were included in the doctor's bill or hospital bill they would be eligible. Most of them are available without prescription.


Gordon Francis Higgins: I believe they should be
included because they are as important as the others.


Douglas Charles Abbott: We have been proceeding on
these things year by year in consultation with the department of health and welfare. As my hon. friend will recall from last year, one of the difficulties is the ability to check the validity of the claim. But I will consider his representations. I think we will probably find that from year to year we will have to include more of these drugs.


[Stage Direction]
Paragraph agreed to.
8.	That special deductions from income to taxpayers whose principal business is the production, refining or marketing of petroleum or petroleum products or the exploring or drilling for oil or natural gas or mining or exploring for minerals, be allowed for expenses incurred in the 1954 operations on the same basis as for expenses incurred in the operations in the years 1951 to 1953.
Douglas Charles Abbott: Perhaps I could say a brief
word, Mr. Chairman, on this paragraph and the two succeeding ones. The amendments to be founded on these paragraphs will extend for another year the concessions now allowed for exploration expenses in the mining, oil and gas industry and will assure the exemption of the first three years of income of any new metalliferous or industrial mineral mine that comes into production before the end of 1954.


John Lambert Gibson: It is a rather curious thing
that the only natural resources receiving these special exemptions are oil, gas or mining and exploring for minerals. These commodities, of course, produce a great deal less revenue than the most important thing we have in Canada, our forest resources. I have been a rather patient soul, since I have been waiting for a number of years to hear that some consideration had been given to our forest resources. Always the government was considering this problem or giving it careful study. That has been going on for six years. While I know there have been many problems that the government has faced and solved in that time, I am afraid that they have put this forestry problem down at the bottom of the heap. Evidently they thought there was no necessity for giving it consideration.
As the minister will agree, our forests are our greatest source of revenue from a taxation point of view. They probably have the greatest potential value for the future. We are going to have forests today and forests tomorrow. I think we can guarantee that

Income Tax Act
the minister is going to get a substantial part of his revenue from the forests as long as Canada is here. The way the matter stands now, a taxpayer can deduct his expenses so far as forestry and silviculture are concerned on the particular piece of property from which he is taking logs at the present time. No incentive at all is given to any of our great forestry corporations, large or small, to try to provide a supply of wood for the future. As a matter of fact, the government seems to have a negative approach to the whole question. They say, "Yes, we realize it is a desirable thing that forests be put on a sustained yield basis." But on the other hand, they do not give any encouragement at all to people to invest money in growing trees. I am wondering whether there is any possibility of the minister giving some definite consideration to this problem within the next year, with a view to encouraging people to invest their money in growing timber.
Actually, the government seems to feel that someone might make a capital profit out of growing trees. It is that negative approach that annoys me. The minister will say: It is desirable to grow trees; on the other hand, if we encourage anyone to grow trees he may make a capital profit and I would not get anything out of it.
I believe that is a negative approach to the matter. I think something should be done to encourage people to invest their money in the future timber of this country. We allow people to lay up treasure in heaven be permitting them to deduct their charitable donations up to ten per cent.


Douglas Charles Abbott: Some avail themselves of the
opportunity, and some do not.


John Lambert Gibson: I think as most people get older they invest a greater part of their income in that way, because they are getting closer to the time when it might be of value to them. I would suggest the government should give consideration to allowing companies to invest say five per cent-I would not go as high as ten per cent by which they are allowed to lay up treasure in heaven-of their gross income for the practice of silviculture. That would limit it. I quite understand the difficulty with which the department is faced, but it does not seem to me there has been any constructive approach to this problem. We have not done anything about it. I sincerely hope the minister will give serious consideration to it this year.


Douglas Charles Abbott: I do not know this of my own personal knowledge, Mr. Chairman, but I understand my colleague the Minister of Resources and Development is discussing the fMr. Gibson.]
question which the member for Comox-Alberni has raised, not only with the provinces but with an interdepartmental committee he has formed in his department.


Solon Earl Low: It is an extremely important point.


Douglas Charles Abbott: I agree it is a matter of considerable importance.


Herbert Wilfred Herridge: It is not often I find myself in agreement with the member for Comox-Alberni on taxation proposals, but I believe this is an extremely constructive proposal. There is a great demand throughout the country for conservation, both on the part of the government and on the part of private timber owners. I believe it would be of much greater advantage to the country to allow a certain proportion of taxes to be used for silviculture, rather than to allow people to deduct from taxation the money they invest in developing mines which produce minerals that are not required at this time. I believe there is a more reasonable argument in favour of a tax allowance for those who are practising silviculture than there is in some cases of mineral production.


Agar Rodney Adamson: Mr. Chairman, I was happy to listen to other industries talk about this matter, and I may say I wish them well. I take exception to the statement just made that minerals are produced which are not required.


John Lambert Gibson: Gold, for instance.


Agar Rodney Adamson: We shall come to that next week, I hope. If there is anything this country needs today it is minerals, particularly metals that are in such desperate shortage throughout the free world. I notice that this measure merely extends for a period of one year the benefits, or the tax concessions, of previous years. In view of the increasing cost, and the increasing incidence of failures to discover mines as well as the lessening of prospecting throughout Canada, is the minister considering increasing these tax concessions? Has he had representations about this, and has he given any consideration to announcing the same concessions for a longer period than one year? In many cases it takes four or five, or possibly a great many more years, to bring even, a most promising property into production. The raising of capital today is still a difficult matter.


Douglas Charles Abbott: My hon. friend appreciates that this is a complete exemption. One can write off expenses entirely, and it is extended really for a period of three years. It is extended forward into 1953. Our practice has always been to give that much advance notice each year-in one case it goes to

1954. It has always been felt that it is desirable to review it each year, and that has been our practice for a number of years.


Solon Earl Low: Mr. Chairman, I believe the minister is quite justified in asking for an extension of this type of encouragement to prospecting. At the same time I believe the hon. member for Comox-Alberni has made a very important suggestion, and one which should be followed up. There is a much better case to be made for what he has proposed than there is for allowing^ certain income tax deductions for exploration preliminary to starting a gold mine on which the people of Canada have to start paying subsidies.


Douglas Charles Abbott: This covers oil wells.


Solon Earl Low: Yes, it covers oil wells. Quite frankly, I think it has gone a long way to encourage exploration for gas and oil in my own province.


An hon. Member:: That is real wealth.


Solon Earl Low: Yes, that is real wealth, of course; and you do not have to pay subsidies on that the minute you get the well started.


Mrs. Fairclough:: That is liquid gold.


[Stage Direction]
Paragraph agreed to.
Paragraph 9 agreed to.
10. That the exemption of the income from a metalliferous or industrial mineral mine for the first three years of production now applicable to mines that came into production during the years 1946 to 1952 be extended to mines coming into production in the years 1953 and 1954.
Agar Rodney Adamson: I cannot allow this comment about gold to go unanswered.


Douglas Charles Abbott: We will have another debate on that subject.


Agar Rodney Adamson: We are going to have a debate on that subject next week; but I want to tell the hon. member for Peace River and his entire party that gold is one of the most useful things we are producing today in Canada. When the minister comes to find what an adverse balance of trade we have with the United States at the end of this fiscal year, he will be wishing that the gold production in Canada was twice what it is today. But I reserve any further remarks on that matter until the debate on the gold bill.


[Stage Direction]
Paragraph agreed to.
Resolution agreed to.
Resolutions reported, read the second time and concurred in.
Canadian Commercial Corporation

Douglas Charles Abbott: for leave to introduce Bill No. 294, to amend the Excise Tax Act.
Motion agreed to and bill read the first time.


CUSTOMS TARIFF
Douglas Charles Abbott: for leave to introduce Bill No. 295, to amend the Customs Tariff.
Motion agreed to and bill read the first time.


INCOME TAX ACT
Douglas Charles Abbott: for leave to introduce Bill No. 296, to amend the Income Tax Act.
Motion agreed to and bill read the first time.


CANADIAN COMMERCIAL CORPORATION
[Stage Direction]
The house resumed, from Wednesday, May 16, consideration in committee of Bill No. 284, to amend the Canadian Commercial Corporation Act-Mr. Howe-Mr. Beaudoin in the chair.
On section 1-Minister.
The Deputy Chairman:: Shall clause 1
carry?


George Alexander Drew: Before clause 1 carries, I would remind the parliamentary assistant to the minister that there was a discussion taking place at the time the house rose when this bill was last under consideration. He will recall that the questions were directed to the relationship between the Department of National Defence, Department of Defence Production, the Canadian Commercial Corporation and Defence Construction Limited. The impression I gained from the explanation given by the minister, both on an earlier occasion and in the fairly brief remarks that were made a few days ago when this bill was last under discussion, was that the Canadian Commercial Corporation is diminishing its activities in relation to domestic contracts and is more and more becoming the agent through which contracts on behalf of foreign powers are executed.


George James McIlraith: That is right.


George Alexander Drew: If that is so, I think there
should be a statement that will clarify the-position of this company in that respect so-

Canadian Commercial Corporation that we may know whether it is entirely divesting itself of responsibility for domestic contracts or only partially doing so; and also, if that is so, whether it is the Department of Defence Production or one of these other agencies which will assume the responsibility for domestic contracts.


George James McIlraith: Mr. Chairman, I felt that
the discussion, on the last day this measure was before the committee, got a bit away from the point and away from the legislation. The situation is that this corporation has ceased to carry on the wide functions it carried on last year and up until the end of the last fiscal year, as the procurement agency for the armed services. It is now left with the function of being a procurement agent for certain other countries, for their purchases in Canada in some fields; that is, the purchases may or may not go through this corporation.
For instance, as is well known, base metals are purchased in Canada by other countries directly from the companies concerned. But in other types of direct defence production, purchases would go through the Canadian Commercial Corporation. In order to illustrate just how sharp was the reduction, I indicated that the staff had been reduced from about 660 to about 40. Its function is as described by the leader of the opposition, namely, the purchasing agency for foreign governments in Canada.
There is one minor limitation on that description. Certain bulk purchases of one or two materials that may be made for Canadian account would continue to go through it. As hon. members will appreciate, I am referring to one or two strategic materials. They might be purchased through Canadian Commercial Corporation. But with that exception, there is no purchasing for the Canadian defence department through this corporation. I think that clarifies the point raised by the leader of the opposition.


George Alexander Drew: Without asking for a disclosure of the nature of the strategic materials-and I would concede that the nature of these strategic materials does not affect the point that I have in mind-will the parliamentary assistant indicate why it is desirable that strategic materials of that kind which are subject to domestic contract should be dealt with by the Canadian Commercial Corporation instead of through the Department of Defence Production, as in other cases?


George James McIlraith: Merely because some of
them are bought in other countries and they may be under international allocation. By the very nature of the small number of these materials we are discussing, they are either
{Mr. Drew.]

bought in the main in foreign countries or, if they are bought in Canada, they relate to a distribution that may be of particular interest to our neighbouring country. In other words, it is not at all a matter of leaving in this corporation something that is ordinarily purchased for use by the armed forces. It is rather a matter of leaving this one small item there, because by the very nature of dealing with it, it is more or less international in its effect. I realize that I have not been quite as precise on that subject'as I might wish to be; but I think hon. members will fully understand why.


George Alexander Drew: In seeking to understand the reason for still continuing this function, it appeared to me that perhaps one of the reasons that the Canadian Commercial Corporation was to be continued as a corporate entity for the purpose of making certain of these contracts was the possibility that there might be certain desirable features in having contracts with foreign governments for certain types of supplies and armaments made by a corporation of this nature instead of between governments. Is that one of the reasons?


George James McIlraith: Yes, that is so.


George Alexander Drew: Just so that we shall have this relationship clear, am I to understand that the amendments that are now being made are mainly for the purpose of tidying up this act in relation to its remaining functions as an agent of the Department of Defence Production under the direction of the Minister of Defence Production in the negotiations of contracts on behalf of other governments, and as an agent in connection with strategic supplies, where those strategic supplies are being acquired in other countries, or where there may be some joint interest in the strategic supplies as between this country and some other country?


George James McIlraith: Yes, that is quite correct. That is the correct view. The only section at all that involves a new principle is a very small section having to do with superannuation of employees. The others merely tidy up existing sections.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-Purpose of the corporation.
George Alexander Drew: In the case of clause 3, with the explanation that the assistant to the minister has given, I am mainly concerned with the extent of the powers conferred by section 3, paragraph (d). I would point out that the explanation that is given suggests-


George James McIlraith: What section?

Private Bills


George Alexander Drew: Section 3 (d). It would add the following paragraph to the powers conferred on the corporation. It reads:
(d) to exercise any other powers or functions conferred1 upon it by any other act or for the exercise of which it may be employed under any other act.
Then I note in the explanatory notes on the opposite page the following:
These added paragraphs, conferring on the corporation the powers therein mentioned are inserted for two reasons: first, to replace part II of the present act being repealed by clause 7; and second, to resolve the legal doubt raised as to whether the corporation may exercise a power not included among its specified purposes.
I would point out that that is a very broad statement; because, if the corporation is exercising powers not included among its specified purposes when these are so widely stated, I should like to know the nature of the powers which are contemplated by such an amendment.


George James McIlraith: I think I can clear that up. It is a rather simple point, but purely technical. A doubt was raised as to whether this corporation would have the capacity to carry out powers that were authorized by another act to be given to it. It is one of those rather intricate legal arguments that I am not anxious to get into at the moment because it gets too refined.
The corporation was set up to perform the function we have been discussing. Then the question arose about its legal capacity to carry out functions provided for by other legislation. In other words, it was not a matter of what was legally authorized by legislation, but a matter of the capacity of this agent to carry out things as agent that are legally authorized by other legislation. I am quite frank to say that I do not know whether I agree with the legal doubt at all. The doubt was expressed. I quite frankly question the validity of the doubt. The doubt was raised.


Stanley Howard Knowles: The doubt was doubtful.


George James McIlraith: The doubt was doubtful.
That is precisely the difficulty. There was nothing beyond that involved.


George Alexander Drew: This is exactly what I do want to know. Just what was the act to which this doubt referred, and what was the doubt?


George James McIlraith: I do not know that I can give a specific instance. In drafting this bill we had this situation. A question was raised, for instance, about what "minister" meant in the bill. Then there was a question about the pensions provision. We took any section where there had been any lack of clarity about what was intended, and had these amendments
brought in at the same time. This amendment does not involve anything other than what was stated to be the capacity of the corporation when the corporation legislation was before the house. This is rather one of those technical things involving clarification of language. As I say, I do not know that I am prepared to say that the doubt raised was a valid one. I do not think I am prepared to go that far, but it had been raised. There is a similar situation in the next section. If you look back to the old debates you will find the section does precisely what it was stated was being done the last time the bill was up.


Stanley Howard Knowles: It is six o'clock; there is no doubt about that.
At six o'clock the Speaker resumed the chair and the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.

[Stage Direction]
On the order for private bills:
Mr. J. W. Welbourn (Jasper-Edson):: Mr. Speaker, I should like to ask the unanimous consent of the house to move that Bill No. 269, to incorporate Independent Pipe Line Company, be dealt with as the first order of business at this time. I should like to stress to hon. members that this bill covers a matter of great urgency and importance, not only to the provinces of Alberta and British Columbia but to the Dominion of Canada as a whole.
There is at the present time a production of 205,000 barrels per day in Alberta. The Interprovincial pipe line can handle
95.000	barrels of oil, and the existing refineries in Alberta together with tank car shipments oan look after approximately
55.000	barrels, leaving a surplus of 55,000 barrels which at the present time cannot be marketed owing to lack of transportation.
The Independent Pipe Line Company is an all-Canadian concern which is Canadian financed. If they are successful in obtaining a charter from the board of transport commissioners the line will be -built by Canadian contractors using equipment owned and licensed to operate in Canada. The bill provides distinctly that an all-Canadian route will be followed. There is an estimated market in Vancouver and central British Columbia for from 45,000 to 55,000 barrels of oil per day. The line designed to be built by the Independent Pipe Line Company is designed to handle from 50,000 to
60.000	barrels per day, which can be raised

Private Bills
to 125,000 barrels per day by the installation. o 1 additional pumping stations. For the second time I am asking unanimous consent to have this bill considered at this time.


Mr. Speaker:: Has the hon. member unanimous consent?


Some hon. Members:: Agreed.


Mr. H. W. Winkler (Lisgar):: Mr. Speaker, I cannot consent tor reasons which I need not go into fully at this time. I might mention that there are five other bills before this particular bill, and in view of the large number of divorce bills before us, I think some of them should be disposed of first.


Mr. Speaker:: Unless there is unanimous
consent, I cannot put the motion.


John William Welbourn: May I say a further word?


Mr. Speaker:: With the unanimous consent of the house.


Some hon. Members:: Agreed.


John William Welbourn: I should like to say that
I think that this bill is much more important than any provincial divorce bill.


Mr. Speaker:: Has the hon. member unanimous consent?


Some hon. Members:: Agreed.


An hon. Member:: No.


Mr. Speaker:: As there is a negative vote, I cannot put the motion.



PRIVILEGE-MR. KNOWLES

Stanley Howard Knowles: Mr. Speaker, before you leave the chair I should like to raise a question of privilege. In the May 19 issue of The Ensign, a marked copy of which was sent to me, this paragraph appears on page two:
Latest move by Stanley Knowles (C.C.F.-Winnipeg North Centre) to try and get divorce courts set up in Quebec and Newfoundland is his effort to have both houses of parliament deal with divorce suits from these provinces individually, instead of in batches as at present. Resulting delay, he hopes, might influence the provinces to set up their own courts.
Before I come to my question of privilege with reference to the report in The Ensign, may I also draw attention to a subheading to a Canadian Press story which appeared in the Montreal Gazette of May 16. The Canadian Press story was perfectly correct but the subheading read as follows:
C.C.F. party insists Quebec cases be taken to courts of province.
My question of privilege with reference to the report in The Ensign and to the subheading in the Montreal Gazette is that both are incorrect in their suggestion that I want

Quebec divorce cases transferred to courts inside the province of Quebec. I have read with interest many reports in newspapers in all parts of the country and I have heard radio broadcasts with respect to this matter and, except for these two instances, universally the point has been caught and made clear by the press and by radio reporters that what I am seeking support for in the house is that divorce cases should be transferred from parliament to a federal court here in the city of Ottawa.
I would point out further that not only is the suggestion that I want Quebec to set up divorce courts completely in error so far as my own wishes are concerned, but it could not be done. The British North America Act specifies that legislation respecting divorce is a federal matter. Quebec could not set up its own divorce courts if it wanted to. We all know that they do not want to. I for one am opposed to trying to force onto or into the province of Quebec, or the province of Newfoundland, any divorce courts. My whole claim is that these cases should be taken out of parliament and be dealt with in Ottawa by a federal court situated in this city.



CONSIDERED IN COMMITTEE


[Stage Direction]
Bill No. 114, for the relief of Paul Emile Piuze.-Mr. Winkler.

[Stage Direction]
The house in committee on Bill No. 119, for the relief of Antonio Romeo-Mr. Winkler -Mr. Beaudoin in the chair.
Stanley Howard Knowles: I should like to point out
that this is a case where a child is concerned. This child appears to be in the custody of the father and husband who is seeking the divorce. The petitioner indicated before the Senate that at the present time the child is in a convent. It appears from the evidence that the guilty party is the wife. There is not much I want to say about this particular case. The story set out in this evidence is not recommended reading. However, having read it myself, I feel that this is another case that should have been dealt with in a court.


Mr. Hansell:: I should like to make one
comment. It very often strikes me, as it does in this particular case, that, while there may not be what is generally known as collusion among the principals involved, in this and many other cases there could be collusion between witnesses. I shall let the legal minds in the house battle the question through as to whether collusion between witnesses is permissible. However, I am under the impression that witnesses should be called separately not knowing the story

that the other witness is going to tell. Too often in these cases, as in this case, the two investigators give evidence that sounds too much alike to me. If there was a slight difference here and there it would give more evidence that they were speaking the truth.
This is a rather sqrdid case. I think perhaps it should go through, but I should like to call the attention of the committee to a piece of evidence that the investigators gave which to me does not appear to hold water completely. As these investigators go into the room they find the door is not locked.


Howard Waldemar Winkler: What page?


Ernest George Hansell: Page 10. That may or may
not be particularly significant in the light of the fact that when they got in the room they found that this man and woman were very drunk. I have never been drunk in my life and I do not know what it feels like to be drunk.


An hon. Member:: It would do you good.


An hon. Member:: You should try it some time.


Ernest George Hansell: I have seen a few people
drunk, and it did not seem to me that they could talk in a very coherent manner. Nevertheless when the investigators talked to these two in the room they seemed to be able to answer the questions because they appeared to know all the answers in spite of the fact that they were very drunk. Judging the whole case as I see it, I am in favour of granting this application.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.

[Stage Direction]
The house in committee on Bill No. 120, for the relief of James Edward Thomas-Mr. Winkler-Mr. Beaudoin in the chair.
On section 1-Marriage dissolved.
Stanley Howard Knowles: Mr. Chairman, there are a
few particulars about this case of which I think the committee should be aware. In the first place it is noted that the petitioner is the husband and he is a private in the Canadian army. I am glad to note that the Senate committee recommended the remission of at least a part of the fees required in the other place in view of the difficult circumstances in which this man finds himself. It appears that there are two children, and that at the time the application was
Private Bills-Divorce made before the Senate they were in the custody of the father and were staying with his mother. He indicated that the wife had access to visit them but of course he is supporting the children.
He said in the course of his evidence that he was not supporting his wife. If the evidence of adultery in this case is valid I certainly do not blame this man for not supporting his wife. Where is this place called Rawdon? It seems to have been the scene of the adultery, and I notice that it is named in a number of these cases as the place where the evidence is obtained. Again, Mr. Chairman, it seems to me that parliament should be aware of the seriousness of the job that we are undertaking in dealing with these matters. This is indeed a sad case. This wife and mother has run out on her soldier husband and two children. Again it seems to me it is the kind of case that should have been dealt with in a court.


Mr. Knight:: This is one of the cases in which I am interested because of the fact that there are children involved. One is four years of age and the other two. These little children are left to the mercy of people who were not able to get along in their marriage. That is an unsatisfactory situation, because no one knows who is to take care of them. In the meantime we are told they are in the custody of the mother of the father of the children, but that the wife who, according to the decision of the Senate, is the guilty party, also has access to them. I suggest to you, sir, that quite outside of the merits of the case there is a nasty situation. The two little children, one four and one two, are just getting to the stage where they can begin to recognize and love their parents. Yet nobody knows who owns them and nobody knows who is to take care of them. There will probably be another battle between the parents as to who will have custody of them.
That is one of the reasons why I suggested the other night that I thought it was a foolish procedure to have a court as at present constituted, which, while it has the responsibility and the authority to dissolve a marriage, apparently deliberately takes the position, as I read in a case the other night, that it has no responsibility in the matter of the custody of children. So far as I am concerned, that is the main interest that I have in this and similar cases. I would say that in this case the home is already broken up irreparably, but there is one thing that can be done. The lives of these little children can be salvaged. I suggest that the method by which they can be salvaged is to have a properly constituted federal court under

Private Bills-Divorce whose jurisdiction the business of such salvage would come. At the present time these little children are being sent from pillar to post without parents, without anybody, taking any interest in them.
I think the responsibility in this matter falls upon us. That is why I said the other night that, so far as I am concerned, if we are going to do this work we should do it carefully and well, from now on scrutinizing each case in the short time at our disposal. There is not much time available. It is a scramble to get the evidence read in time to be able to speak about it. I think we should resolve from now on that if the House of Commons is a divorce court we shall have to carry out our duty as best we can in view of the responsibility which we owe to the people who sent us here as well as to these parents and children. I am quite certain that the people who sent me here did not send me to be a judge in a divorce court.


Ernest George Hansell: In this case I should like to point out something similar to what I pointed out the other evening in respect to another case, and I shall read a little of the evidence here. It is in respect to whether or not the marriage certificate issued by the officiating clergyman is proof of marriage. Mr. Phillips was the solicitor in this case and he asked the witness this question:
Q. I show you a marriage certificate giving the details of your marriage. Is that a true record of your marriage?
A. Yes, sir.


The Chairman:: Who is that signed by, Vatcher?


Mr. Phillips:: Yes, by the officiating minister.


Joseph-Alfred Dion: You haven't one from the superior court?
There was no reply to that. The chairman then asked:
Q. This is the one you received from the minister at the time of the marriage?
A. Yes, sir.
The only evidence they had to prove this marriage was the certificate the clergyman had given them, and that is not usually accepted as proof of a marriage. The reason for that is that you can go to a book store and buy marriage certificates. You can tear marriage certificates out of family bibles. Such a certificate could be signed by Reverend John Smith of Timbuctoo and palmed off as a marriage certificate. The document that is proof of marriage is an abstract of the registration of that marriage; and the marriage is not registered until the official documents other than marriage certificates are made out and registered with the proper authorities in the various provinces. Upon the registration of that marriage one may obtain an abstract of that registration. That


is accepted as proof of marriage, because the officiating clergyman signing the certificate must be licensed by the province.
I am not arguing against this case, for the reason that the wife of the man applying for the divorce testified herself, and on her evidence I believe the application should be granted. I just point out that an ordinary marriage certificate given by a clergyman is not necessarily legal proof that a couple are married.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.

[Stage Direction]
The house in committee on Bill No. 121, for the relief of Mary Louise Webster Hunt -Mr. Winkler-Mr. Beaudoin in the chair.
On section 1-Marriage dissolved.
Stanley Howard Knowles: I wonder if the sponsor of this bill, the hon. member for Lisgar, can say how much time was spent on this case by the committee on miscellaneous private bifis.
Mf. Winkler: I believe this bill was dealt with in bulk with a number of others.


Stanley Howard Knowles: I am not surprised at that answer, because that is the way most of them are dealt with as far as the committee on miscellaneous private bills is concerned. It is clear that the case was given fairly ample consideration in the Senate because the evidence runs to fifteen pages, which is a little more than the average of the books of evidence that come to our desks.
After reading this evidence I acknowledge the job the members of the Senate committee do. I have no quarrel with them and no reflection to cast upon the way they do their work. My whole point is that they should not be asked to do it, just as we should not be asked; and I am sure they would like, as we would, to be rid of the whole matter.
This case appears to be another of war's tragedies. This couple were married in 1937 and appear to have lived together quite happily for a number of years. They had one child. The husband enlisted and went overseas, and it appears that after a while his letters to his wife became infrequent and a bit unfriendly. She suspected that he must have formed another attachment overseas, but she had no evidence to that effect and it was her hope that their marriage was

still intact. However, when he came back to Canada at the end of the war he got in touch with his wife and indicated that it was not his intention to live with her. It was not long after that before the wife lost all track of her husband, and she had to do her best to support herself and her child. As a matter of fact from the time he came home after the war until August, 1950, the husband did not contribute anything to the support of his child.
Sometime before 1950 this wife learned that her husband was living in Belleville, Ontario, with another woman. Indeed the information that reached her was that he and the other woman had another child and that they were living together in Belleville as a family. On learning that, this lady took steps to obtain a divorce from her husband. Before doing so she had applied to the Ontario courts at Belleville and obtained an order compelling this man to pay $25 a month for the support of his child. I am wondering just what happens to that court order once this divorce goes through. I do not find anything in the evidence to indicate what will happen to it, but in the absence of any question being raised by the senators who made up this committee I dare to hope that this man will be required to continue that payment of $25 a month for the support of his child.
To get back to the story of what this soldier did after he got back to Canada, as I say he got in touch with his wife and indicated that he did not wish to live with her any more. Later it appears that he was instrumental in persuading the Canadian immigration authorities to bring to Canada the girl whose name is Betty. Her last name seems not to be known, but she came from England. It is this girl with whom he is living at Belleville. Now, the evidence seems to be fairly clear. It seems to me it is evidence not only of adultery, but it is evidence of the first marriage having been dissolved by the action of the husband in going off and living with another woman and starting to raise another family.
Hon. members will recognize-


Mr. Murray (Cariboo):: May I ask a question at this point?


Stanley Howard Knowles: -that I recite these facts with nothing but sorrow. The whole story is a sad one, and everyone will feel-


George Matheson Murray: I rise on a point of order.


Stanley Howard Knowles: -that it is a tragedy.


George Matheson Murray: I think that this literature is pornographic, to say the least very lewd, and it is very poor taste to bring
Private Bills-Divorce it before this body in the presence of children. If the hon. gentleman wants to go ahead I would move that the page boys and persons of immature years be cleared out of the chamber.


Stanley Howard Knowles: Mr. Chairman, may I point out for the benefit of the hon. member, and I hope he has been listening, that in none of the cases I have read from on any of the nights we have been discussing these matters, have I quoted any evidence from those cases that could be characterized by the words he has used. In several of the books I have, I have portions crossed out so that I will not read them, not even by mistake. I submit that the point of order is not well taken.


Louis-René Beaudoin: I heard the point of order raised by the hon. member for Cariboo, and I heard the explanation that was provided by the hon. member for Winnipeg North Centre. I have been listening carefully to the remarks made by all hon. members who have participated in the debate this evening, and I do not think there were any references to parts of the evidence which might cause any alarm to the hon. member for Cariboo. His point of order is not well taken, and I think the hon. member for Winnipeg North Centre may continue.


Stanley Howard Knowles: Mr. Chairman, I had just about finished my remarks on this case when I was interrupted. I was referring to the tragedy of this whole business. It cannot but make one feel that way. Nevertheless, one feels particularly sorry for the wife and the child in this case. There does seem to be nothing we can do but confirm the dissolution of the marriage that has already taken place by the actions of the husband. I feel, however, that this case, like all the rest of them, should have been dealt with in a court.


Ernest George Hansell: Mr. Chairman, I appreciate the objection which the hon. member for Cariboo has raised, and those of us who have attempted to discuss the evidence on these bills have purposely avoided anything that might be objectionable. Might I answer the hon. member by saying that this is the very reason we want these divorce bills taken to some other court and not have them brought before this body. Now, that is the objection.
Mr. Chairman, a question was asked of the member sponsoring this bill as to whether this particular bill was gone into when it was before the private bills committee. He answered that this was one, with a number of others, that had been recommended and was passed in bulk. Now, that is not to be regarded as any reflection upon the committee or the chairman of that committee. I happen to be a member of that committee,

Private Bills-Divorce and I suppose it might be argued that I could have spoken to this bill in the committee instead of in this chamber. Well, a member has a right to argue it in either place or in both places. In fairness to the chairman of the committee I will say that should any of us have any objection to any bill, we do not have to pass them in bulk. The chairman is quite ready and willing for us to present our arguments on any one of these bills.


Louis-René Beaudoin: Order. Will the hon. member please indicate to what chairman he is referring, because in this committee there is only one chairman. I believe he should refer to the sponsor or to the chairman of the committee on private bills.


Ernest George Hansell: I am sorry, Mr. Chairman, I meant the chairman of the private bills committee, and not Your Honour. You are both excellent chairmen. I would say this, however, in respect to bringing these bills before the private bills committee. We do not always have the evidence before those bills are presented to us. I suppose we take it for granted that someone has read the evidence. I know there is sometimes difficulty in getting things printed because of the tremendous backlog of printing that has to be done by the printing bureau. I did want to mention that because we did not want to cast any reflection upon that committee.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Preamble agreed Co.
Title agreed to.
Bill reported.

[Stage Direction]
The house in committee on Bill No. 122, for the relief of Marie Blanche Amilda Lessard Duplessis-Mr. Winkler-Mr. Beaudoin in the chair.
On section 1-Marriage dissolved.
Robert Ross (Roy) Knight: The other night, in talking about this matter, I cast some doubt upon the integrity of investigators. If we consider some of the bills before us here, I believe we shall come to the conclusion that a lot of these investigators make their money simply by this, what I consider, nefarious trade. My friend refers to it as a "racket" and I shall agree with him to that extent, but I would rather have my own phraseology. In the preceding bill, one might have noticed that the lady involved was unknown, except in so far as her first name was concerned. Apparently these investigators could not find out her second name. They could find out everything else, but they just knew her first name. There was no other name in the

evidence, and no one knows what the lady's maiden name was. I come now to this Bill No. 122 which concerns a certain lady by the name of Duplessis residing in Montreal, who sues for divorce from her husband. It is sad to note that this marriage took place in 1921, almost thirty years ago. Now, we have a divorce case.
I was speaking, sir, about the integrity, or lack of it, of these investigators. I should like to draw to your attention that in this particular case the alleged adultery upon which the verdict was given was committed with an unknown woman in the city of Montreal. Now, sir, these investigators were able to find out everything else but were unable to ascertain the name of this woman. I believe, sir, it is a fact that some of these investigators are not as straightforward as they might be. I am going to suggest that these women can be obtained for the particular purpose of supplying evidence in these particular cases. There is a conviction in many quarters that a good many of these cases are the result of collusion and that the evidence at times is faked. I think that matter should be brought to the attention of the public.
May I say that the public knows nothing about these divorce bills. The public does not know to what extent we in the House of Commons are crucified by the study of these divorce cases, to say nothing of the senators in the other place. I think it is a good thing that it should be on the record of the House of Commons that one or two members at least, among whom I am one, believe that many of these cases are the result of collusion, the result of faked evidence which is deliberately obtained by the sort of investigators, lawyers and witnesses that we have in some of these cases. When I say that, I am casting no aspersions on the profession that I have named, because I am well aware of the fact that a reputable lawyer would have nothing to do with that kind of thing.
But there is the position as I see it. Some of these cases are those in regard to which I think there may be some suspicion. It is too facile, too easy to be able to go out and get divorce evidence. I am told that in certain cases you can go to these people, and you do not have to do anything. They simply provide the evidence. They provide everything. The whole thing is arranged and that is the end of it. It is disgusting but it is true, in my opinion.


Ernest George Hansell: There are just one or two things I should like to bring out in connection with this bill and which I think might be of some value to members of the committee. In the first place, may I say that I

have found some difficulty in being able to determine the difference between connivance and collusion. This is one case in which that difference appears to be explained. I should like to put this on Hansard; it is to be found at page 11 of this evidence. I should like to read it, with your permission, Mr. Chairman. Some little argument went on between the chairman and one of the solicitors in this case as to the meaning of these words. The solicitor said that he always understood "connivance" and "collusion" to be synonymous terms. The chairman, Mr. Aseltine, a man who has given some considerable study to this matter, puts him right on this particular point. He says no, that there is a difference in the meaning; and he pulls out a volume, I suppose by Power, because that is what he reads; and this is what he says:


Joseph-Alfred Dion: Power on Divorce. It deals with collusion, connivance and condonance. It is the easiest thing in the world to study. For instance, if a woman arranged to have her husband found by detectives under certain circumstances-


Mr.   Gaboury@: That would be collusion.


Joseph-Alfred Dion: That would be connivance, she
was arranging the evidence. Collusion is an arrangement between them. To give you an example, after you commenced an' action she could go to her husband, and arrange not to have a contestation.


Mr.   Gaboury@: That would be both collusion and
connivance.


Joseph-Alfred Dion: Or that she give him something.
That is collusion.


Mr.   Gaboury@: And it is connivance too.


Joseph-Alfred Dion: No, you only connive at the
adultery.
That throws some light on that particular point. There is another matter, Mr. Chairman, that I should like to bring to your attention. I have always wondered how much it might cost these people to go through the process of obtaining a divorce; and I find that here that information is brought out. The witness is asked by the solicitor:
Q. How much have you paid now? A. $800, I think.
Q. $800? A. Yes.
Q. Does that include the full parliamentary fees paid, $210?
The Clerk of the Committee:	Yes, it has been
paid, Mr. Chairman.
Looking at this particular case, I feel that that is a great deal of money to pay for what this man got.


Stanley Howard Knowles: This woman.


Ernest George Hansell: For what this woman got, I should say. It is a woman in this case. Her husband had been actually living with the other woman for about a year. Even the chairman makes the remark

perhaps I had better read it to you. It is to be found at page 13 of the evidence:


Joseph-Alfred Dion: I don't know why you want to
hire detectives in a case like this, why didn't you take your client and go down there yourself?
Private Bills-Divorce
It was only a matter of going there and finding that they were living there as man and wife; and they had been living there for about a year. Yet it cost this woman about $800. Perhaps that is cheap; I do not know. Some costs may run a great deal higher than that. But that is a great deal of money. I think the chairman of this committee is to be commended for calling that matter to the attention of the solicitors. I think the Senate committee that handles these cases are humane, and that they are to be commended for that action.
There is one other point in this evidence that I do not like, and I will read it to you. This investigator goes into this room, turns on the light and commences to say what he saw; and he says "An old woman-". Then Senator Howden rather butts in and asks the question: "Q. An old-?"; and before he can say anything else the investigator says:
A. An old lady, she looked to be fifty or fifty-five.
I do not like that. I do not call a lady of fifty or fifty-five an old lady or an old woman. Many of them look quite young at that age. Besides, if that is so, how old does that make me? Perhaps the investigator could be a little bit more careful in his appraisal of the age of the fair sex.


Stanley Howard Knowles: It has been pointed out that the question of the cost of this case to this woman was raised in the Senate committee. That was done because the senators were aware of the circumstances in which this Mrs. Duplessis found herself. I am glad to know that the Senate recommended remission of all the fees, except the sum of $125. I should like to ask the sponsor of the bill if he knows why the Senate never seems to put the fee down to a lesser figure than that. There are many cases of poverty. In view of the $800 it is costing this woman I wonder whether it would have been possible for them to have put the fee at an even lower figure.


Howard Waldemar Winkler: I understand that in many cases the Senate committee does cut the fee down. What the lowest fee is I cannot say.


Stanley Howard Knowles: I appreciate that. Perhaps the hon. member would get the answer to that question before we get back to this matter on another occasion. I may say I am a little surprised that we are dealing with these matters tonight. I understood that there was going to be a request for unanimous consent to go on with another bill. So far as I was concerned, I was only too ready to give that unanimous consent. I did so by my silence, and I have now confirmed it.
However, we are dealing with these matters. There is just one other point I would

Private Bills-Divorce
wish to make, namely, that in this case, sad as it is-this marriage of thirty years being dissolved-at least there are no young children to worry about. The members of the Senate committee became aware of that. Apparently it startled one or two of them. This is the record on this point:
By the Chairman:
Q. Was the marriage consummated? Did you live together as man and wife? A. Oh, yes.
Q. Did you have any children? A. One boy.
Q. How old is the boy? A. The boy is 28 years old.
Q. Oh, he is grown up? A. Yes.


Joseph-Alfred Dion: Well, we don't have to worry
about any infant children.


Mr.   Gaboury@: No.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.

[Stage Direction]
The house in committee on Bill No. 123, for the relief of Anne Fineman Segal-Mr. Winkler-Mr. Beaudoin in the chair.
On section 1-Marriage dissolved.
Major James William Coldwell: I should like to say a word about this bill, if I may, because it has some very interesting features in it. This is another case where there is a child of the marriage. When I look at the evidence I find that the child is small, two years old or thereabouts. The mother of the child, who is suing for the divorce, is questioned as follows:
Q. And you continued to live with your sister and you still do? A. Yes, sir.
Q. Do you work,-? A. Yes, sir.
Q. What do you do? A. I work in a restaurant as a cashier.
I just want to emphasize, as a cashier in the city of Montreal. The questioning continued:
Q. Were you working at the time these proceedings were started? A. No, sir.
Q. And your sister looks after your child? A. Yes.
Q. Is your sister married? A. Yes.
Q. Has she any children of her own? A. Yes, a little girl.
Q. And is her husband living? A. Yes.
Q. With her? A. Yes.
Q. And apart from your earnings as a cashier have you any substantial property? A. No.
Here is the point that I am going to emphasize:
Q. How much do you earn a week? A. $25.


Stanley Howard Knowles: Shame.


Major James William Coldwell: She earns $25 a week working in a restaurant in Montreal as a cashier. We sometimes hear of cases where cashiers are accused of theft, and when you consider

that a cashier in a restaurant is paid $25 a week at the present time when the cost of living is so high, and she contributes-


Louis-René Beaudoin: Order:	Perhaps I
did not follow the hon. member closely right from the start, but in the last minute I did hear him talk about salary and the cost of living. What the relevancy may be I do not know.


Major James William Coldwell: It was part of my argument. Because of the very high cost of living, a wage of $25 a week does not enable this woman to bring up that child decently. After all it is the child in this particular case that I am particularly interested in at the moment. I am pointing out that she has no income other than the $25 a week that she earns as a cashier in a restaurant, and she has to pay her board and the upkeep of her child to her sister. That is borne out by this question and answer:
Q. Have you received any money from your husband since he left you? A. No.
Q. Nothing at all? A. The first two or three weeks he would send $5 or $10, and then he didn't send any more.
Here is another case where there is a child. The woman appears to be the innocent victim, and she has to bear the cost of the upbringing of that child. I am quite ready to admit that a transfer of the matter to the exchequer court probably would not help in this particular, but in my opinion the whole matter of divorce, particularly as it affects children in these cases, should be gone into very thoroughly; because we have an obligation not only to the innocent party but to any children of the marriage. I am pointing out that it is impossible for this woman to bring up this child properly herself and maintain her appearance as a cashier when the wages are as low as those she gave to the Senate committee as having been received.
Here again we have one of those cases that have been so frequently mentioned tonight where investigators have been employed. They followed, according to their story, the man to a hotel in Montreal. They found the number of the room and they went to the room. Then they knocked on the door and the door was unlatched. The man in the case unlatched it, and then this statement is made:
And Mr. Golden and I forced our way into the room.
They forced their way into the room, and upon the basis of what they saw on that occasion divorce proceedings are commenced. One other point, because I think this may be a deserving case. Again you have the same story. Questions are put the detective

by the chairman of the Senate committee about the other woman in the case, as follows:
Q. Did you get her name? A. I tried to but she answered me in French in not very nice words.
In other words, no name again of the other party.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.
Howard Waldemar Winkler: the third reading of Bills Nos. 114, 119, 120, 121, 122 and 123.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


Alphonse Fournier: On division.
Motion agreed to and bills read the third time and passed on division.


Mr. Speaker:: It being nine o'clock the house will resume the business which was interrupted at six o'clock.



CANADIAN COMMERCIAL CORPORATION


[Stage Direction]
The house resumed consideration in committee of Bill No. 284, to amend the Canadian Commercial Corporation Act-Mr. Howe- Mr. Beaudoin in the chair.
On section 3-Purpose of the corporation.
George James McIlraith: Mr. Chairman, at six
o'clock we were discussing paragraph (d) of section 3 and I had indicated that this amendment was intended to clarify the power of the corporation because of a legal doubt that had been raised as to its authority. The leader of the opposition had asked what was the act to which this doubt referred, and what was the doubt. The act to which the doubt referred arose in connection with the purchase of some wool stock. There was no doubt raised as to the right to buy wool outside of Canada, but a legal question was raised as to the right to pay for wool bought within Canada; it was as to that part of the transaction that doubt was raised.


Howard Charles Green: Would that power not be given by paragraph (c) which gives the corporation the power to exercise on behalf and under the direction of the minister any powers or functions vested in the minister by any other act that authorizes the minister to employ the
Canadian Commercial Corporation corporation to exercise them? Would that not be broad enough to enable the corporation to do this purchasing?


George James McIlraith: Apparently not. The purchase of the wool was authorized under what was then the Essential Materials (Defence) Act and a question was raised as to the payment for the part purchased in Canada out of funds of the Canadian Commercial Corporation under the other section. The hon. member has put his finger on the point. It was thought that paragraph (c) was wide enough and that the authority in the other act to use the Canadian Commercial Corporation to carry out the functions authorized by the other act would be wide enough. Apparently there was a question raised beyond that. As I made clear earlier, I found it difficult to concede that there was legal doubt, but that is the situation that has developed.


Howard Charles Green: May I suggest to the parliamentary assistant that there would seem to be a rather dangerous principle introduced by the latter part of this paragraph (d). The first part of paragraph (d) gives the Canadian Commercial Corporation the power to exercise any function conferred on it by any other act. If some other act sets out that the Canadian Commercial Corporation can do certain things, the corporation can carry on accordingly. But the latter part of this paragraph (d) seems to confer wide-open authority to do anything without parliamentary sanction and without any act referring to the corporation. It says:
-or for the exercise of which it may be employed under any other act.
The key word is "employed". That means that a minister administering any other act may decide to employ the Canadian Commercial Corporation, and that would be permitted under the latter part of this paragraph. Surely that is contrary to the whole intent of the act and is against parliamentary principles because there is no parliamentary check. In other words, broad power is being given here without any definition by parliament at all, power for other ministers to use this corporation. I think that is most unwise and is going too far.
It looks to me as though in trying to widen this power the officials have gone too far. It would not be the first time they have done that because they like to make sure that there is sufficient power in an act. Quite often they do not seem to think about the powers being excessive, but I suggest that here is a case where excessive powers are being sought.

Canadian Commercial Corporation


George James McIlraith: Mr. Chairman, with due
deference to the hon. member for Vancouver-Quadra I must say that the interpretation which he places on the latter part of the paragraph is much too wide. It simply provides that the corporation may exercise powers for the exercise of which it may be employed under any other act. There must be authority under another act to employ the Canadian Commercial Corporation. But having employed the corporation as agent to procure materials this paragraph makes it clear that the other powers granted in the Canadian Commercial Corporation Act can be used. For example, there would be the right under section 8 to use funds of the corporation. It has that much narrower interpretation.


Howard Charles Green: The parliamentary assistant interprets these words as meaning that there must be some other act which actually sets out that the Canadian Commercial Corporation can be employed?


George James McIlraith: That is right.


Howard Charles Green: If that is what it means, that meets my objection.


George James McIlraith: Some other act or some other legislation having granted the right to use the corporation, then the corporation can use all the provisions of its own act.


Howard Charles Green: The parliamentary assistant means that the Canadian Commercial Corporation cannot be employed by any other department or any other crown company unless there is an act which actually sets out that it can be employed by that branch or agency of government?


George James McIlraith: That is right; there has to be the other authority. Of course there is the earlier section which we are not amending about exports and imports. Perhaps I could revert for a moment to the act that caused the difficulty. It was a matter of payment, not the authority to be employed as the agent; it was the question of using the funds of Canadian Commercial Corporation to make payment for part of the wool which had been bought in Canada. I admit it seems to be a refined argument. The hon. member will realize that lawyers differ, and I thought it was an over-refined objection. However, there it was.


George Alexander Drew: Mr. Chairman, I do not think any of us want to split hairs in regard to the interpretation of this section, but like the hon. member for Vancouver-Quadra I feel that there is a dangerous tendency to try to cure imaginary or uncertain troubles by simply saying, "Well, all right, we will put in something wide enough so that there


will be no chance that it will not deal with everything that may arise." The parliamentary assistant was good enough between six o'clock and the time we resumed discussion of this bill to indicate some of the considerations that had led to the inclusion of this amendment. However, I would point out to him that there' is one act in connection with which it is not necessary for the Canadian Commercial Corporation to be designated and in which there are wide powers. Under the Emergency Powers Act there is almost limitless power to set up any type of organization by order in council and then designate the Canadian Commercial Corporation as the agency for carrying out that particular function. One reason why I feel it is very unsatisfactory to put in a wide-open provision of this kind is because it is quite frankly stated in the explanatory notes on the opposite page that the purpose is to take care of any powers conferred upon it which are not specifically covered by its present designated powers. That would mean that, while at the present time Canadian Commercial Corporation has certain designated powers under the act which brought it into existence, and while under other statutes such as the Defence Production Act there would be some general limitation as to the nature of the activities that could be covered, under the Emergency Powers Act activities in no way contemplated by the general purpose of the Defence Production Act or the general designated purpose of this act could be carried forward, and then Canadian Commercial Corporation would be deemed to have powers for such purpose.
That might seem to be creating imaginary problems, but I believe the time has come when, unless there is some very clearly stated reason, we should hesitate to give these blanket powers under any statute. I do not want to labour the matter unduly but I would point out that the Emergency Powers Act passed during this session was passed with the statement that in the first place it repealed the emergency act passed last September and conferred wider powers on the government so that the powers might be wide enough to introduce price controls. That was the reason stated. The government needed no wider powers to establish priorities, to stockpile or to do any of the things contemplated from the point of view of positive control and allocation of supplies, but it was stated by the minister who assumed responsibility both for the drafting and the argument in support of the bill that the wider bill was needed so that the government might deal with price controls.
We have come this far in the session and the government has still given no indication

that it has any thought of exercising the one authority for which it obtained wider powers. With that as an example I suggest that we should not give wide powers like these without specific information as to why they are needed, and not just a general statement that somebody may have some doubt about some wool contract. For that reason I move:
That subsection (d) of section 3 be deleted.


George James McIlraith: Mr. Chairman, there may
be a question of order as to moving the deletion of a section, but leaving that aside for the moment and reverting to the argument, if the Emergency Powers Act is as wide in its authority as the leader of the opposition says it is then of course orders passed under it can re-enact any of the clauses asked for here. I submit that argument is wholly irrelevant to the section we are discussing. The section under consideration has to do with a situation stated clearly in the explanatory note referred to by the leader of the opposition. The note reads in part:
. . . and second, to resolve the legal doubt raised as to whether the corporation may exercise a power not included among its specified purposes.
Under section 4 of the Canadian Commercial Corporation Act the specified purpose in the wool contract related to the right to import wool, and the only other section dealing with powers was part II of the act which had to do with materials for the defence department. The wool purchase did not come directly and squarely within either of these two specified purposes in the Canadian Commercial Corporation legislation. Therefore we had an extraordinary situation where we were seeking to buy wool for defence purposes to provide uniforms- and I think properly seeking to do so-and we could pay for wool bought in other countries but could not pay for wool bought in Canada. The purpose is to clear up that sort of situation. The authority to buy wool of course arises from the essential materials legislation.


Howard Charles Green: Would not the very fact that
it arises from the Essential Materials (Defence) Act enable the Minister of Defence Production to exercise these powers and others?


George James McIlraith: That is precisely my point. The answer is no.


Howard Charles Green: Under the new subsection (c)
the Minister of Defence Production can ask the Canadian Commercial Corporation to exercise his powers. Surely subsection (c) covers it.


George James McIlraith: It is a curious situation but apparently it does not. Apparently the authority under the Defence Supplies Act to
Canadian Commercial Corporation employ the services of the corporation is not wide enough to permit them to use their own money to pay for it in the meantime.


Howard Charles Green: Should that not be met by an amendment to the Essential Materials (Defence) Act rather than putting in a very broad subsection such as subsection (d)?


George James McIlraith: I think the answer to that
is that subsection (d) is not broad. The authority must come from another act, and once the authority comes to use the Canadian Commercial Corporation then the corporation can exercise any other powers which it may be empowered to use under the other clauses of its act.


Howard Charles Green: If there is another statute
passed which specifically states that the Canadian Commercial Corporation may do certain things, surely that is sufficient without then amending the Canadian Commercial Corporation Act to say it can do the things that the other act has said it can do. That is just duplication. Surely there is no need to bring in two statutes to achieve that end. I feel quite confident the parliamentary assistant will agree with me that it is not necessary to do that.


George James McIlraith: I suppose the answer to that would be to bring before the house all the other legislation authorizing the use of the Canadian Commercial Corporation, amend each section giving that authority and put it in the widest possible language, but this amendment makes it clear that the Canadian Commercial Corporation has, if authorized under other legislation, full capacity to act as authorized.


Howard Charles Green: The very fact it is authorized by other legislation-


George James McIlraith: Is not sufficient. We are back now on the argument that caused the doubt. If my hon. friend's interpretation had been the one accepted by the law officers then of course there would have been no doubt and the section would not have been necessary, but we are back to the original argument that caused the doubt. I must say that I rather agree with the hon. member's point of view, but that is precisely the argument that caused the doubt.


Howard Charles Green: The position then is that the parliamentary assistant agrees with me that the amendment is not needed so far as he personally is concerned. He has quite frankly expressed his opinion that the amendment is not necessary. Why should that not be sufficient without our being compelled to put aside our opinions and adopt the opinion of some law officer of the crown who may not know half as much about the legislation as

Canadian Commercial Corporation we do? I have not found the law officers of the crown infallible. After all, they are only there to advise, but their opinion is not necessarily correct and need not necessarily be accepted. Here they have taken a pile driver to drive a tack. They have taken far wider power than is necessary to meet the situation which is worrying them. I suggest that the parliamentary assistant should accept the amendment of the leader of the opposition. If an amendment is necessary that amendment should be to the Essential Materials (Defence) Act, and not to this act at all.


George James McIlraith: I think the hon. member for Vancouver-Quadra quite overstated my position. I did not assert that I either give the time, or have the opportunity to give the time, or at the moment think it perhaps desirable that the time be given, to a study of some of the more intricate legal arguments raised from day to day on a great many matters. I for one find it desirable and necessary to take the opinions of competent legal men in the various departments on their own work. I find it a very good rule to follow that, if you nave an expert whom you trust, you should take his opinion. If you do not trust him .then perhaps he should not be employed.
I am asked why I do not accept the amendment and leave out this section. The answer is that very shortly we would be right back in the situation in which we found ourselves previously. A short time ago we had to buy wool. We found that we could not pay for any wool bought in Canada, though we could pay for wool bought in other parts of the world, which was a most extraordinary position. This section clears up that difficulty; but I suggest it is not a wide section, and that the proper method is to amend this act to make it clear that the Canadian Commercial Corporation, if authorized by any other legislation, has the right to use all the powers given it under its own act. For that reason I have no alternative but to regretfully reject the amendment of the leader of the opposition.


Wilbert Ross Thatcher: This section does give the minister fairly comprehensive powers. I do not think this group objects to those powers being taken, but we do wish the minister or the parliamentary assistant would use those powers to see that there is a greater diversification of the contracts that are being given out. Since the original legislation was discussed several months ago the minister has seen that western Canada has been given certain airport contracts, for instance. Perhaps the maritimes have been given a little also; but generally speaking I think it is still true that western Canada and the maritime provinces are not being given their


fair share of these defence contracts by the Canadian Commercial Corporation.


George James McIlraith: That is nonsense.


Wilbert Ross Thatcher: A look at the statistics will bear that out.


George James McIlraith: No, it will not.


Wilbert Ross Thatcher: I beg to differ.


Mr. Claxlon:: Look at the figures.


Wilbert Ross Thatcher: I look at them every week when they come out; that is why I am speaking now.
The Depuly Chairman: Order. Perhaps we should not go into the allocation of contracts by the Canadian Commercial Corporation.


Wilbert Ross Thatcher: Section 3 (d) gives the parliamentary assistant wide powers. All I want him to do is use those powers to give western Canada and the maritimes their fair share of these defence contracts. I still cannot believe they are getting it. If they are, let the minister say so tonight, and let him tell us what he is doing for our part of the country.
The Depuly Chairman: Is the committee ready for the question?


Wilbert Ross Thatcher: Would the minister not say a word on that?


Alphonse Fournier: He would be out of order, as you were.
The Depuly Chairman: I must tell the hon. member that in my opinion it is not in order on this amendment to discuss the point he has raised. Is the committee ready for the question?


George Alexander Drew: No, Mr. Chairman. I know these legal arguments in regard to the interpretation of acts and the breadth of amending sections may seem at times very boring and like a waste of time. I would recall, however, that step by step we have been seeing the powers of parliament whittled away by the extension of wider and wider powers through amendments or whole new acts, in which very little definite information is given beyond the fact that someone thinks powers of this kind might be needed. I refer again to the Emergency Powers Act passed earlier this session, which gives this government the widest powers ever conferred upon any democratic government except in time of general war. Those powers were extended by the majority vote of this parliament with practically nothing before this house to demonstrate the need for powers of that kind.
As I pointed out earlier the one reason, the only clear reason, given for the extension of such powers was that it was necessary to make the earlier emergency powers still

wider so the government could deal with price controls. There were general statements as to the need for stand-by powers; there was the statement that many of the things the government might require to do would never become necessary as long as sweeping powers of this kind were available, which those who might be affected would know might be exercised. Those powers are there. I would point out that under those powers there is no question, and none has ever been suggested, but that the government could by order in council-and this is merely an example-take over the operation of the Hydro Electric Power Commission of Ontario.


Mr. Jeffery:: A good idea.


Brooke Claxton: What has that to do with this bill?


George Alexander Drew: I am not going to be diverted by comments so ridiculous as those just made. If the hon. member who made that remark had any understanding of the extent of the experience, to say nothing of the efficiency, of the Hydro Electric Power Commission of Ontario, he would not make an utterly silly and irrelevant comment of that kind.
That could be done. I ask the parliamentary assistant if he would question the proposition that if such an order were made, as the Minister of Trade and Commerce said in the earlier discussion of this subject it could be made, the Canadian Commercial Corporation could then be appointed as agent to operate it. I have used that only as an illustration. The same thing could be done to take over all the operating oil fields of Alberta, or to take over the iron development in Labrador. It could be done to take over any other operation regarded by. the government as something that was needed for the general welfare of Canada during a period of emergency, which was the basis for the act that was passed earlier in the session.
That being so, Mr. Chairman, I simply repeat that this house in committee is disregarding the responsibilities of parliament if, without anything more than a general statement that somebody thinks they need powers of this kind to deal with a wool contract, we should confer powers so wide, when at the very time the amending bill is before us the parliamentary assistant says he does not believe it is actually necessary.


George James McIlraith: He did not say that.


George Alexander Drew: Surely at some point this house must say it is not going to accord the government further and wider powers simply to resolve doubts, when the specific case can be dealt with if necessary by an amendment to the section of the act under which these
Canadian Commercial Corporation powers were conferred. The Canadian Commercial Corporation was given very wide powers when it was brought into being by an act passed on August 31, 1946. Simply to illustrate why I am taking objection to the extension of wider powers with nothing more before us than we have at the moment, let me read section 4 which designates the purposes of the corporation:
(1) The corporation is established for the following purposes:
(a)	to assist in the development of trade between Canada and other nations, and
(b)	to assist persons in Canada
(1)	to obtain goods and commodities from outside Canada; and
(ii) to dispose of goods and commodities that are available for export from Canada.
(2)	The corporation shall comply with any general or special direction given by the governor in council or the minister with reference to carrying out its purposes.
Then, it goes on in section 5 to say:
5. (X) The corporation may do such things as it deems expedient for, or conducive to, the attainment of the purposes set forth in section four of this act; and, for greater certainty, but not so as to restrict the generality of the foregoing, the corporation may carry on the business of:
(a)	importing goods or commodities into Canada, and
(b)	exporting goods or commodities from Canada, either as principal or as agent, in such manner and to such extent as it deems advisable to achieve the said purposes.
(2) The generality of subsection one of this section is not restricted by any provision of this act other than section four thereof.
Now, Mr. Chairman, with these wide powers which cover every aspect of the activities which the ministerial assistant has stated this corporation now requires, I suggest that there is no occasion to pass an amendment which extends powers beyond those wide powers; and that those powers, as conferred by the act itself, conform fully with what we have been told the act is now going to be called upon to do. I repeat that the explanation of the object of the amending section, written in by those who drafted the legislation, says-


George James McIlraith: Not by those who drafted the legislation.


George Alexander Drew: Frankly I had hoped it was,
because I had hoped it was drafted by those who knew what the purpose was. I take the correction. These words are put in perhaps by someone else, but whoever wrote them, the words which are supposed to explain the amendment as written on the left-hand pages say:
... to resolve the legal doubt raised as to whether the corporation may exercise a power not included among its specified purposes.
It means only one thing, namely that the intention of this amendment is to give to the Canadian Commercial Corporation powers

Canadian Commercial Corporation not covered by these designated powers passed by parliament. I suggest again, Mr. Chairman, that with the statement of the parliamentary assistant that, in his opinion, it is not needed, without any specific legal argument to show why it is needed, parliament should not pass a power of this kind. Therefore I close my remarks with the hope that on this occasion an amendment of this kind may not be pressed so that parliament itself can, at least on this occasion, assert its authority to control legislation until it knows exactly why something should be done.


Howard Charles Green: These objections are raised in the best of faith in the belief that this section is too broad. Perhaps the parliamentary assistant would have no objection to letting this bill stand over the week end, and have it considered further by the experts.


George James McIlraith: No, I think there is every objection to that. We have had some questions about the defence production department awarding contracts in various parts of the country. I should very much like to answer that specious argument that is being put forward rather regularly, taut this is neither the occasion nor, in my opinion, is it within the rules to deal with it here. I must say I would rather welcome the opportunity to deal with it.
Then we got into another discussion about the wisdom or lack of wisdom of taking over the Ontario hydro, and about how well run the Ontario hydro was. I also have some views about that, but I do not think this is the place or the occasion for me to express them.


George Alexander Drew: I do not want to interrupt, but I would point out that I did not raise this subject. I simply raised this as an example, because the minister himself had on an earlier occasion said that this act had sufficiently wide powers for that purpose.


George James McIlraith: However tempting it might be to discuss the Ontario hydro, I assure the leader of the opposition that while he has strong opinions about it, I have equally strong opinions about it.


George Alexander Drew: Knowing nothing about it.


George James McIlraith: Knowing something about it. I came to the conclusion, long before I reached the age I now have, that all knowledge was not given to any one man.


Edmund Davie Fulton: That is self-evident.


George James McIlraith: Yes, it is self-evident. It is one of those things I believe one should learn very early in life. I do not know that it is proper for one member to say to another member that he does not know anything

about this subject or that. He may or he may not. I have an idea that all members know a great deal about a great many subjects, and I have never been tempted to take the attitude that other members do not know anything about the subject under discussion. I do not believe in that point of view.
In any event, that is not the point before the chair. At the moment, the point is rather narrow, ahd it concerns paragraph (d) of section 3. The leader of the opposition makes some such remark as, "Let's start asking questions". I should like to be permitted to continue my argument without a lot of questions about this or that. The leader of the opposition correctly read sections 4 and 5 of the Canadian Commercial Corporation Act. It will be noted that these sections deal exclusively with export or import. This power is being taken, to clear up a difficulty that arose in another part of the Canadian Commercial Corporation Act having to do with the procurement of defence supplies. It was thought that the power in that legislation providing for the use of the capital made available to Canadian Commercial Corporation for making temporary payment of purchases would be sufficient in certain circumstances, but that was found not to be so.
I did not take the position that paragraph (d) of section 3 was not necessary. It is necessary, otherwise I would not have come here with the paragraph in the bill asking hon. members to approve it. The paragraph reads:
(d) to exercise any other powers or functions conferred upon it by any other act or for the exercise of which it may be employed under any other act.
Now, we had an' experience where this corporation was employed under another act in its proper function of procuring raw wool supplies. The point was raised that, having been employed to buy this wool, it could only buy the wool from other countries under the very sections read by the hon. leader of the opposition. It was found that the corporation did not have the power to pay for wool bought in Canada. Do hon. members want the corporation left in the position of having to buy only from foreign countries? If it is to pay for the goods itself, that is what happens. It can buy in Canada if it is not paying for the goods itself. Do hon. members want that situation to continue? I suggest the amendment is as simple as that, and I suggest the amendment is as narrow as that.
I indicated earlier the functions of the corporation, which are now much narrower than they were. Its only function now being

performed where this situation would arise at all would be in certain types of bulk purchases, of which there are very few. To leave ourselves in the position where the corporation could not use its own capital to make certain emergency bulk purchases is not what the members of the committee want.


Howard Charles Green: Why could it not do that for the Department of Defence Production? It could act as purchasing agent for the Department of Defence Production?


George James McIlraith: Yes, it could buy for the Department of Defence Production, and not use its own capital. It cannot make any firm contracts and use its own money to act quickly. The difficulty arose under the Defence Supplies Act in this specific instance. I was asked for the particular example, and that was it. It arose under the Defence Supplies Act where there was authority to employ the corporation and the corporation was employed, and then it was found that there was no way of handling the money end of the transaction.


Howard Charles Green: But the corporation can act as agent as well as do buying with its own funds.


George James McIlraith: Quite so.


Howard Charles Green: There is no reason why the wool could not be bought in that way.


George James McIlraith: How would it be paid for?


Howard Charles Green: It could be paid for out of the funds of the Department of Defence Production.


George James McIlraith: There is no fund at all under this legislation, I am told, out of which it could be paid for; that is, the Canadian part of the wool.


Wilbert Ross Thatcher: The parliamentary assistant said that the prairie provinces now were receiving their fair share of these defence contracts and he would welcome the opportunity to put the figures on record. If I am wrong in that-


George James McIlraith: That is not quite what he said.


Wilbert Ross Thatcher: I am sorry if I have not been accurate. Did he not say something along those lines?


Louis-René Beaudoin: Order. That information will be in order on some other occasion. It is not in order to have those figures given here. Is the committee ready for the question?


Some hon. Members:: Question.


George Alexander Drew: Mr. Chairman, I hope we can deal with this matter without an attempt
Canadian Commercial Corporation to set up a straw man, as was done with regard to an illustration that was used simply to try to clarify the extent of the activities that would be embraced by such an amendment as this, because that has some bearing on whether an amendment of this kind is necessary. The parliamentary assistant has now indicated that there is one specific case. He has indicated that this was a case which arose under the priorities act passed last September. We all know that that act was repealed by the emergency-


George James McIlraith: It is not repealed yet.


George Alexander Drew: As a matter of fact, the act is automatically superseded by the act which was passed at this session; and the powers conferred now are much wider than those which were made available under the other act. Therefore it seems-and in that I was under the impression that the parliamentary assistant shared that view, from what he said earlier this evening in this committee- that it would be possible to deal with this contract in that particular way. But even if it were not, that could be dealt with by a specific amendment. But now we are asked to extend these powers to cases where they will go beyond the specified purposes of the Canadian Commercial Corporation, as approved by this parliament. We ought to know what it is we are doing; because this power is not to be limited to this one case; this is a wide general power to engage in activities not covered by the purposes established by parliament. If we are going to do that, then I suggest that we should know something of the scale of the activities. For that reason I think we should know exactly how many contracts have been executed by the Canadian Commercial Corporation which are now being handled by that corporation, and what the value of those contracts is, so that we may know something of the scale of the business being done by the corporation which is being given these increased powers. Can the parliamentary assistant give us that information?


George James McIlraith: Those precise figures, with the values, are on record and were given at an earlier stage in committee on section one. They are therefore all there.
I think I ought to point out to the committee, however, that a few minutes ago the leader of the opposition read sections 4 and 5 of the Canadian Commercial Corporation Act as it now stands. He then omitted to read part II of the act which deals with the whole subject of defence purchasing. He will note that by section 7 of the bill now before the committee, part II of the act is
3196	HOUSE OF
Canadian Commercial Corporation repealed, and that the only powers that the corporation has on this subject are those now under discussion in section 3 of the bill now before the committee.


George Alexander Drew: That was the reason I did not read the other part.


Edmund Davie Fulton: I would take it, from the wording of the amendment itself and from the wording of the explanatory note, that were it not for this amendment there would be a legal doubt whether the corporation could exercise any powers beyond those given it in its parent act and which it might be called upon to exercise, outside the scope of the powers in the parent act, by some other agency or body which asked it to do something for that agency or body. I would gather that if that were the case-that is, if this amendment did not pass-then the proper way to resolve the doubt expressed in the explanatory note would be on each occasion that some other body asked the Canadian Commercial Corporation to exercise some function for it-on each of those occasions if there were a doubt as to whether Canadian Commercial Corporation could in fact exercise that function-to pass a specific short bill amending the Canadian Commercial Corporation Act in order to give it that power. Is that not the case?


George James McIlraith: No; I am afraid that is not the case, Mr. Chairman. I am afraid that I must, with deference, differ with the hon. member. That is not the case at all. In the first place, I am not clear to which act the hon. member referred when he used the term "parent act".


Edmund Davie Fulton: The parent act is the Canadian Commercial Corporation Act which gives the Canadian Commercial Corporation its power and defines its functions and duties.


George James McIlraith: The powers of the Canadian Commercial Corporation were to deal with export and import; and the powers are indicated in sections 4 and 5. Then under part II it was given authority to purchase for the national defence department. That was done in 1947. That part is being repealed. It has now been given authority limited to performing functions authorized by parliament in any other act. In other words, it is making clear that if another act in itself gives power to use the Canadian Commercial Corporation, the Canadian Commercial Corporation shall have the capacity to function in that instance. The amendments are as simple as that, and that is the extent of them. If I may pursue the matter a bit further, the reason why paragraph (c) was not sufficient, and the first part of paragraph 

(d), was explained in the illustration I used about the wool. The whole point is as simple as that.


Edmund Davie Fulton: I think the parliamentary
assistant and I are almost agreed on this subject. [DOT] I am referring to section 3, paragraph (d); and the point I am trying to establish-and I think the parliamentary assistant has practically confirmed it-is that Canadian Commerical Corporation is given certain functions and powers under its parent act. It is being asked by bodies established under other acts to exercise certain additional functions. From the explanatory note I would gather that there is doubt whether Canadian Commercial Corporation has the legal authority to carry out those functions, because there is doubt whether the powers conferred in the parent act-that is, the Canadian Commercial Corporation Act-give it scope to do so. So I come back to the point I made at first. If it were not for the meaning embodied in paragraph (d) of section 3 now before us, the only way to resolve that doubt would be, each time the Canadian Commercial Corporation was asked to exercise some additional function about which there was doubt, to pass a short amending bill, amending the Canadian Commercial Corporation Act, saying that Canadian Commerical Corporation shall have power to exercise this function. Is that not the case? Instead of either leaving the matter in doubt or having that short amending act passed each time, you are now seeking by the broad, general scope of paragraph (d), to make it clear that Canadian Commercial Corporation has the power, whenever another agency calls upon it to exercise an additional function. That seems to me to be the situation. You are seeking to avoid the necessity of passing an amending act each time a new agency or board calls upon the Canadian Commercial Corporation to exercise some function which was not clearly and specifically given to it under the original Canadian Commercial Corporation Act. Is that not a fairly accurate statement of the situation with respect to paragraph (d)?


George James McIlraith: I am afraid I cannot accede to that explanation.


Edmund Davie Fulton: What is the meaning of the explanatory note which says that the purpose is:
To resolve the legal doubt as to whether the corporation may exercise a power not included among its specified purposes.


George James McIlraith: I have gone over that many times as best I could. I am sorry that I am not able to make myself very clearly understood, or explain the thing in such a way as would be understood by all hon. members. The Canadian Commercial Corporation is not

seeking to get power under this to do things not provided, where it is not authorized to act under other legislation. In other words, it is complete control by parliament over any function it can perform.


Edmund Davie Fulton: I never said anything to the contrary.


George James McIlraith: It is this other doubt as to whether it could use its own powers. I am sorry that the explanatory note 3 is drafted in the way it is. If it had been drafted to read, "not included among sections 4 and 5 of the Canadian Commercial Corporation Act", it would have been clearer and more accurate. Hon. members will see, for instance, there is a section, seotion 8, where the corporation is given some authority. Well, that doubt arose; section 8 is not applicable even though the corporation was performing the act authorized by other legislation for it. That is the doubt that is being cleared up by the legislation.


Edmund Davie Fulton: Would it not be correct to say that paragraph (d) does constitute an enlargement of the powers of the Canadian Commercial Corporation, or a generalization of the powers? Is it not correct to say that previously the powers were outlined in clear and specific terms in section 4 of the Canadian Commercial Corporation Act? If you pass paragraph (d) of this amendment, then the powers will be generalized, and to that extent extended, because the corporation will be enabled to exercise any powers which any other agency or board set up in any other act calls upon it to exercise. Surely, to that extent it must be a generalization and an extension of the powers of the Canadian Commercial Corporation.


George James McIlraith: It is not a generalization of the powers, Mr. Chairman. If the other act provided that the Canadian Commercial Corporation may be employed to perform a service, then this makes it clear that the Canadian Commercial Corporation shall have full capacity to use its own act and all the provisions in its own act in the performance of all those services. That is the key.


Edmund Davie Fulton: That is not what the paragraph says. It does not say to exercise its powers or functions, that is the powers or functions of the Canadian Commercial Corporation under the parent act. The paragraph says:
To exercise any other powers or functions conferred upon it by any other act-
It does not say what the parliamentary assistant just said.


George James McIlraith: It was the second part of paragraph (d) we were discussing as I understood it.
Canadian Commercial Corporation


Edmund Davie Fulton: I have been discussing paragraph (d) generally ever since I entered the debate, and my questions have been related to the whole of paragraph (d) in which it does appear to me very clearly to extend or to generalize the powers which the Canadian Commercial Corporation will be able to exercise; because if this paragraph passes it will not be confined in any way to the specific things which it was called upon to do under its own parent act, but it will be empowered to do any of the things which any other board or agency set up under any other act may ask it to.


George James McIlraith: May be authorized to ask it to do.


Edmund Davie Fulton: Well, not exactly. That is not clear in the words of the section, which I will read again.
To exercise any other powers or functions conferred upon it-
Conferred by the Canadian Commercial Corporation. I continue:
To exercise any other powers or functions conferred upon it by any other act.
That is what the paragraph says. In addition then to the powers conferred by the Canadian Commercial Corporation Act, it shall have the power to exercise any other powers or functions conferred upon it-that is the Canadian Commercial Corporation-by any other act. How can it be argued that that is not a generalization or an extension of the powers of the Canadian Commercial Corporation?


George James McIlraith: I am afraid, Mr. Chairman, I must still argue it. I do not follow the latter part of the hon. member's argument. I do not agree with it at all. It is not a generalization at all. It is a particularization, if you like. It is making it clear that the authority must come under any other legislation, but if the authority does come under the legislation, then this corporation will have the capacity to exercise that authority. In other words, it leaves the whole thing squarely within the power of parliament on each occasion.


Edmund Davie Fulton: That is what I said ten minutes ago, anti the parliamentary assistant denied it and said that was not correct. Then, we are back at the proposition that I stated ten minutes ago, namely, that if another act passed by this parliament gives the board or agency set up under that act authority to ask the Canadian Commercial Corporation to exercise certain powers, then the Canadian Commercial Corporation can exercise those powers without the necessity of an amendment to the Canadian Commercial

Canadian Commercial Corporation Corporation Act. That is clear. That is the effect of this amendment; whereas previously, according to the explanatory note, it would not have been clear. I will take a concrete example.
We set up a board to provide for the purchase of steel, and we will say the purchase of steel was not a power given to the Canadian Commercial Corporation under the Canadian Commercial Corporation Act. Now, we are setting up a board under a separate piece of legislation to exercise powers of the government in connection with the purchase of steel, and that legislation says that all its capacities and functions shall be exercised by the Canadian Commercial Corporation. We go back to the Canadian Commercial Corporation Act and we find that nothing was mentioned with regard to the purchase of steel; but, as the parliamentary assistant said, that act contemplated import and export business and not the domestic purchase of steel; so it was doubtful, according to the words of the explanatory note, whether the Canadian Commercial Corporation could exercise the powers involved in the purchase of steel for domestic purposes. There would have been two ways to remove that doubt. One would be a specific amendment to the Canadian Commercial Corporation Act to provide that it shall have the powers to purchase steel for domestic purposes.
Then, if you wanted to set up a board to purchase wool or to purchase nails or to purchase clothing or to purchase anything else you like, it would have been possible to enact at the time a specific amendment to the Canadian Commercial Corporation Act to give it the power to make these purchases. That would have been one way to do it. But now, I gather, it is not desired to pass these specific amendments, giving the Canadian Commercial Corporation these specific powers in each case. Therefore you are passing paragraph (d) of clause 3 of this bill, and you are saying now the Canadian Commercial Corporation shall have the general power. In addition to these specific powers that general power will enable it to exercise any function which it may be called upon to exercise under any other act. passed by this parliament. Surely that is the effect of the explanatory note, and the original act, and the amendment which we are being called upon to pass. Instead of having to pass a number of separate amendments, this is an omnibus clause giving the Canadian Commercial Corporation the power to exercise any other function it may be called upon to exercise in any other legislation.


An hon. Member:: All clear now.
[Mr. Fulton.l


Edmund Davie Fulton: I am glad one hon. member agrees. If it is clear to the parliamentary assistant then we shall have met some of the difficulty. Does the parliamentary assistant agree?


George James McIlraith: I do not think that I can accede to that long argument. A good part of it is correct, but in my opinion a good part of it is off base. I have sought to make the situation as clear as I could and I do not think I could usefully add anything more at this time. I am sorry to leave it in that position.


Edmund Davie Fulton: It is a piece of legislative
laziness.


Mr. Maclnnis:: Mr. Chairman, my only purpose in rising to say a word was to inquire if we could not get this amendment voted on. The parliamentary assistant gets me convinced that it is a good amendment and then either the hon. member for Vancouver-Quadra or the hon. member for Kamloops or the leader of the opposition gets up and convinces me that it is a bad amendment. I think they have reached the stage where they are really convincing each other that something is required. I have come to that conclusion after listening to the hon. member for Kamloops.
I do not believe that he is taking the position that no amendment is required because the explanatory note states that the second reason for the amendment was to resolve the legal doubt raised as to whether the corporation may exercise a power not included among its specified purposes. The parliamentary assistant has told us that some legal doubt was raised in connection with the purchase of wool in Canada, and the hon. member for Kamloops said that that doubt could be resolved in one of two ways, either by passing a specific act every time the corporation came across something that it could not do in order to enable it to do it, or to pass this amendment.
It seems to me that if there are those two alternatives, the amendment is the better one. It would enable the corporation to aot without having to wait for the passing of a bill to enable it to do something that we can give it authority to do by this amendment. It would appear to be all right.


Edmund Davie Fulton: The parliamentary assistant
said that I was wrong, that that is not the effect of the amendment.


Angus MacInnis: No lawyer who is on the opposite side of an argument with another lawyer will say that anything he says is correct. They provide for such a situation in the courts by having a judge who says ultimately which lawyer is right and which is wrong. Unfortunately we have no judge

here. Many of the judges here are laymen like myself and I think we should be given the opportunity to arrive at a decision before the matter becomes too confused.
The hon. member for Kamloops agrees that if the corporation is to do certain things an amendment is required. The only difference is as to what alternative will be used. I prefer the alternative of this -amendment and if it comes to a vote I am going to vote that way.


Edmund Davie Fulton: I should like to make one correction. I did not express any opinion as to whether this amendment is required to enable the corporation to exercise any powers. I merely asked if the amendment was as I outlined it and the parliamentary assistant did not agree that I had outlined it correctly.


Howard Charles Green: The parliamentary assistant
based his argument in support of this amendment on a doubt which had arisen in connection with a deal to purchase wool in Canada. Could he tell us exactly how that deal was handled?


George James McIlraith: I am not an expert on
wool. There is an advisory board on wool headed by Mr. Brown, which was announced recently. On the advice of that board wool is bought-I think the term is "bought forward"-but the amount of cash involved on the part of -the corporation is not always the total value of the wool under commitment. The wool is allocated to the processor and of course is bought only in anticipation of the needs of the various services for the finished article.


Howard Charles Green: How was this particular transaction handled about which there was some trouble?


George James McIlraith: The transaction was put through on the advice of the wool advisory board under the chairmanship of Mr. Brown. It is not a transaction covering the whole quantity which is put through at one time. It is a case of forward buying of wool against the anticipated end use of the finished product. The wool is allocated to the processors to be made into yarn and cloth for fabrication into uniforms and other articles.


Howard Charles Green: Was the transaction handled by the Canadian Commercial Corporation?


George James McIlraith: Yes.


Howard Charles Green: They actually did the buying?


George James McIlraith: Yes.


Howard Charles Green: The complaint was that payment could not be made from their funds?


George James McIlraith: That is right. The legal difficulty arose in connection with payment for that part which was bought in Canada.
Canadian Commercial Corporation There was no difficulty whatever about that part bought outside of Canada.


Howard Charles Green: From what source did the money come with which the wool was purchased if it could not be taken from the funds of the Canadian Commercial Corporation?


George James McIlraith: Apparently it could not be taken from the funds of the Canadian Commercial Corporation, and I am not sure where it finally -came from. The validity of the payment for the Canadian purchases was questioned but it was never anticipated that there was any lack of authority to carry out -the transaction.


Howard Charles Green: Had the funds of the Canadian Commercial Corporation actually been used for that purpose?


George James McIlraith: 1 am not sure that they had been used, but in any event we had to stop buying Canadian wool with the funds of the Canadian Commercial Corporation.


Gordon Francis Higgins: Apparently the explanation given by the parliamentary assistant does not jibe with the explanation given by the minister on Monday, as reported on page 2975 of Hansard. The minister said:
This amendment defines the minister as the Minister of Defence Production, and removes any legal doubt that may exist as to the corporation's authority to perform such services as may be authorized by any other statute, for example the Defence Production Act, even though such authorities are not specifically set out in the Canadian Commercial Corporation Act.
That explanation seems to me to be a little different from the one given to the hon. member for Kamloops.
Amendment (Mr. Drew) negatived: Yeas, 10; nays, 48.


[Stage Direction]
Section agreed to.
On section 4-Grants and advances to corporation.
Howard Charles Green: As I understand it, this
includes a new power. The present situation is that the Minister of Finance, on request of the Minister of Defence Production, must advance up -to a total of $10 million, I think there is also provision for loans to the extent of another $10 million under an amendment made in 1949. Whether or not that is so, there is power given to the Minister of Defence Production to repay into the consolidated revenue fund such portions of the $10 million as he believes are not required. That has been the position for several years. Now we have this amendment under which the Minister of Defence Production will be able to require payment back to the corporation from the consolidated revenue fund of whatever portion of the

Supply-Labour
money he has repaid which he might think at a later time was needed by the corporation.
There would seem to be this objection to that provision. All advances made to the corporation have to be approved by parliament under section 8, subsection 1, I believe, but with this new provision that will not be necessary. The minister pays some of the money back and then without a vote of parliament he can require payment out of the consolidated revenue fund of whatever portion he may think the corporation needs at a later date. I think that is the effect of the amendment, and I would ask the parliamentary assistant to explain whether or not that is correct, and also whether there is a provision of this kind in any other statute.
I have never seen a provision of that type, and it seems to be most unusual.


George James McIlraith: That understanding is not
quite correct. The original amount authorized to be advanced to the corporation was limited to $10 million. The Minister of Finance may from time to time advance funds out of any unappropriated moneys, and so on, up to $10 million. Let me illustrate the point by taking an example. Suppose that ten advances of $1 million apiece had been made. Then there would be no further authority to advance money to the corporation. It is again a case of obscurity of language and two opinions on it. The discussion on the bill when it was put through and when this authority was given was that this would be authority to advance up to $10 million at any time so that the funds could never at any time exceed $10 million but they could be advanced, be repaid and advanced again. That was always thought to be the position. Doubt has been raised as to that and it is made clear by subsection 7 that loans or advances up to $10 million can be made notwithstanding that two years earlier there may have been an advance that was repaid two years earlier. That is the purpose of it.


[Stage Direction]
Section agreed to.
Sections 5 to 7 inclusive agreed to.
Title agreed to.
Bill reported, read the third time and passed.
[Stage Direction]
The house in committee of supply, Mr. Beaudoin in the chair.
DEPARTMENT OF LABOUR General administration-
185. Departmental administration, $558,397.
Stanley Howard Knowles: Mr. Chairman, when these
estimates were before us the last time we had

a series of speeches of some length which were general in nature. It was my intention at that time to deal with a number of matters that come within the purview of this department. However, I will change that plan a bit, make only a few remarks now, and reserve the other matters on which I wish to speak until we come to particular items on which they can be discussed.
Before we leave the first item, I should like to bring to the attention of the minister the representations that have been made to the government from time to time by various labour bodies, and by others who are interested, asking for the introduction of the principle of collective bargaining into the government service. As the minister knows,
I put a question on one aspect of this subject to the Secretary of State the other day. He did not give me an answer then, and I have been waiting hopefully for it day by day. The question I asked the Secretary of State was whether he was aware of the request of the Ontario Federation of Printing Trades Unions to the effect that the employees of the government printing bureau be accorded the right to collective bargaining. He told me he would answer in a few days, and I have a strong suspicion that when I get that answer it will be to the effect that as the legislation now stands there is no possibility of according collective bargaining rights to government employees in the federal printing bureau. Anticipating that I would get this answer from the Secretary of State I realized that my next question would have to be directed to the Minister of Labour, that I would have to ask him if consideration had been given to amending the federal labour code to provide that collective bargaining be accorded the printing bureau employees. Therefore, I assume we can take the answer of the Secretary of State as read, and so I move on to the next stage. Thus I am now putting the matter up to the Minister of Labour.
I feel very strongly that this matter should be considered. Indeed I feel there is a case for collective bargaining in many if not all the branches of the government service, -but I suggest that one -place it certainly could be started is in the federal printing bureau. It does not seem logical that employees of the Canadian National Railways, Trans-Canada Air Lines, Polymer Corporation and other bodies of that sort, which belong, to the government, should be permitted to organize and enter into collective bargaining with their employers while those in the printing bureau, which likewise belongs to the government, -are left in a different category. It seems to me that sooner or later this subject will have to be dealt with by the government as a

whole, but the person upon whose recommendation the government would make any move in this direction is the Minister of Labour, because the Industrial Relations and Disputes Investigation Act comes under his supervision. I draw to the attention of the minister the fact that two of the labour congresses, at any rate, which presented their briefs to the government this year-the Trades and Labour Congress of Canada and the Canadian Congress of Labour-asked for the right of collective bargaining for government employees.
I earnestly hope the minister is giving consideration to this matter. I realize that he has not been in the department very long, that he wants to get his feet, and get the feel of things in the labour field. But I can tell him there is a very strong feeling on the part of many government employees that this should be done. That certainly is the feeling over at the printing bureau. I want to be quite frank about this matter and say I am a member of the international typographical union, which means that I have contacts with many of the employees at the bureau and know how they feel about this matter. Similar representations from other government employees have been made to me, and I urge the minister to take appropriate steps.
That is perhaps the main point I wish to bring to the attention of the minister on this first item. One other matter I should like to draw to his attention is that in the two labour congress briefs to which I already have referred the minister and government are asked to include the check-off in the national labour code. The minister made some reference to this question in an earlier debate, as to whether or not labour really wanted the check-off in the code. I simply draw his attention to the fact that it was asked for again in the briefs of both these congresses. It was interesting to note that one of those congresses appeared before the government at about noon on April 10, asking amongst other things for the deductibility of trade union dues for income tax purposes. As the Minister of Labour recalls, that is one request that seemed to be granted in a hurry, because it was announced by the Minister of Finance in his budget speech that evening. That was, of course, only a coincidence, for that was a battle we had been waging a long time. It is good to know that some of these requests do get consideration, and I hope the minister will seriously consider the matters I have just drawn to his attention; that is, the question of collective bargaining rights for government employees, starting at the printing bureau and moving, I would hope, into other 80709-2041
Supply-Labour
branches of the government service, and the question of including the check-off in the national labour code.
There is just one other matter on this first item, and I will leave the rest until later. This matter the minister may say I should leave until we reach the unemployment insurance item, but I should like to make the point now. The hon. member for Hamilton West referred to it in her remarks the last time these estimates were before us. I refer to the change that has been made in the unemployment insurance regulations respecting married women. As the minister will recall, I asked him a question about this on the orders of the day quite early this session. The point which it seems to me has not been sufficiently emphasized as yet in any public discussion of the matter is the fact that a married woman is now called upon, under the new regulations, to meet an additional requirement which is not imposed on other people in order to qualify for unemployment insurance benefits. A great deal has been made of the argument that unemployment insurance is not supposed to be a fund to provide for a honeymoon. It has been argued that if a woman who has been employed and contributing to the fund marries and quits her job, that is her business and she should not expect to draw unemployment insurance. But there are cases in which a married woman finds it necessary to work because her husband is not able to earn enough to make both ends meet at today's high prices. That woman is available for employment; she reports and wants to work but cannot get work, and is still denied her benefits because she has not proven her attachment to the labour market by being actually at work for 90 days after her marriage.


Mr. Gregg:: If my hon. friend will permit me to interrupt, I am sure he will be glad to learn that later on I have a statement to make on that matter arising out of a series of hearings the unemployment insurance commission has been holding during the last two weeks with representatives of labour unions and others. The recommendations to me will, I think, almost entirely overcome the objections my hon. friend raises. Later on I shah be able to put that on the record.


Stanley Howard Knowles: When one gets action as quickly as that I am ready to accede to the minister's request and leave the matter until later. I am indeed glad to hear that consideration has been given the representations that have been made to the minister. I hope the changes to be made will meet the point I have just emphasized.


Milton Fowler Gregg: On the other matter, I am sure the hon. member for Winnipeg North Centre

Supply-Labour
would not want me to anticipate the reply of my colleague the Secretary of State on the question affecting the printing bureau personnel.


Mr. Johnston:: I would like to say one word on this first item, because I do not believe I can say it on any other. It is a matter to which the hon. member for Winnipeg North Centre has already referred; that is, the check-off. Generally speaking I think labour throughout the country is asking for the check-off. Alberta is one of those progressive provinces in regard to labour legislation who have already taken that step. In Alberta we have the check-off if an employee so signifies; and furthermore that check-off is irrevocable for three months after it has commenced. I think that would settle one of the difficulties labour seems to have at this time. They have been endeavouring for a long time to get the check-off. Some provinces have now agreed to that, and I think it would be in the interests of both labour and management in Canada if that provision were incorporated in our labour code. I wish the minister would give consideration to that, and see if there could not be some regulation or amendment made to our labour code so that it would conform to that of some of the other provinces who have already given the check-off.


Milton Fowler Gregg: Mr. Chairman, I shall be glad to give consideration to that matter. On second thought, Mr. Chairman, I believe I should like to put on the record a statement regarding the married women's regulations before this general item is passed.
On November 15, 1950, the unemployment insurance commission made a regulation restricting the payment of benefits to married women. This regulation was designed to stop an unintended drain on the unemployment insurance fund through payments of benefit to married women who had really withdrawn from the labour market.
When the regulation had been in effect for a few months the commission made a survey of its local offices. This disclosed that during the first month after the regulation came into effect a large percentage of married women, whose claims were disallowed thereby, made no further effort to keep alive their applications for employment. Out of 8,884 married women who were disqualified because of this regulation during that period, approximately 18 per cent kept alive their application for employment; 5 per cent reported that they had found work; and 77 per cent allowed their application for employment to lapse.
The first few months of operation, and submissions to courts of referees, also disclosed

certain inequities. The commission proposed to make certain changes in the regulation, the principal amendments being: First, it was provided that the additional conditions imposed by the regulation would not apply to a married woman who left her employment voluntarily with just cause for reasons connected solely with her employment. This proviso was new, and was in addition to the other grounds on which a married woman claimant would not be subject to the regulation. Secondly, it was provided that the regulation would not apply to a married woman whose husband was wholly incapacitated for work for at least four consecutive weeks. The present provision is that the husband must be wholly and permanently incapacitated. However, the wife would not be relieved from having to fulfil the additional conditions imposed by the regulation if her husband was receiving compensation for the incapacity or was continuing to receive remuneration.
Before presenting these changes to the governor in council for approval the commission felt it desirable to consult representatives of the principal labour organizations. A meeting was held on April 10, 1951, to receive their views regarding proposed amendments, a draft of which had been circulated to these organizations beforehand. The organizations represented at the meeting were: The Trades and Labour Congress of Canada, Canadian Congress of Labour, the railway brotherhoods. The Canadian and Catholic Confederation of Labour was unable to send a representative but made known its views in writing.
In presenting the draft amendments for consideration by the unions, the commission pointed out that the result of this regulation, which came into effect November 15, 1950, amply justified the stand taken by the commission and the unemployment insurance advisory committee, and had proved conclusively that a large number of married women, who in the past have drawn benefit, were not actually in the labour market and were causing an undue drain on the fund.
The union representatives agreed that the amendments met many of their objections, but requested modification of two of the provisions as follows: The regulation provides that, to draw benefit, a married woman must be in employment for ninety days following marriage, if unemployed when married, or ninety days after the first separation from employment following marriage if she was employed when married. The unions asked that ninety days of employment should run from the date of marriage in either case. The commission felt that the adoption of this

suggestion would make the regulation of little value as a large number of women continue to work without any interruption for a considerable period after marriage. However, the commission is prepared to modify the regulation to the effect that if a married woman was in employment at the time of marriage only sixty of the ninety days of employment required be after the first separation after marriage. The unions objected to the provision that benefit would be denied a married woman while her husband was incapacitated if he was in receipt of compensation or remuneration while so incapacitated. The commission has expressed its willingness to delete this restriction from the regulation.
Now, Mr. Chairman, I have a rather -complicated outline here which I would prefer not to put on the record at this time because, while this recommendation has been made by the chief commissioner to the minister, it has not been finally adopted by the governor in council, which is necessary to put the regulation into effect. I am quite -confident when that is done it will overcome the legitimate complaints that were made with regard to the married woman question.


Stanley Howard Knowles: The minister's statement is a bit complicated, and we will have to study it closely before expressing a final opinion, but-


Milton Fowler Gregg: That is the reason I put it on the record now.


Stanley Howard Knowles: I realize that, but I am still doubtful whether it will meet some legitimate and deserving cases. I have in mind, for example, one about which I wrote the minister only a few days ago. The minister replied that he would have that particular case looked into. Even though you reduce to sixty days the portion of that ninety days' work that is required after marriage, you are still requiring of married women, before they qualify for benefits, something you do not require of anyone else. The ordinary person must prove, under the Unemployment Insurance Act and regulations, an attachment to the labour market. He proves that attachment to the labour market by being available, by reporting once a week to the unemployment insurance office, and being able and willing to take work if offered. But you require of married women, under the special regulations, not only that they be available and not only that they report once a week; you require that they actually be at work.
If a married woman needs work, wants it, and tries her best to get it but cannot get
Supply-Labour
it then you deny her unemployment insurance benefits to which she is otherwise entitled because she has not proven her attachment to the labour market by actually being at work. It seems to me that is the aspect that is unfair; it is a discrimination against married women. If I have misunderstood what the minister has announced tonight and if he can prove to me it does meet that point I shall be happy to accept it. But I am afraid that what he has just said does not meet that point.


Milton Fowler Gregg: Perhaps we could leave the matter there and refer to it again when we come to the unemployment insurance item.


Ellen Louks Fairclough: Like the hon. member for Winnipeg North Centre I tried to follow this statement as the minister made it. I am sure he would agree, however, -that it is very difficult to get a clear picture from a statement as complicated as that. I do think that, inasmuch as certain other groups were given an opportunity to study these regulations, they might have been made available to those of us who were interested in them. I agree with the hon. member who has just spoken that there is discrimination here. After all this clause in the regulations was designed apparently to curb what was agreed to be a practice that was detrimental to the workings of the act. It is not the only practice which has come into being through the vagaries of employment. There are many classes of workers who, from time to time, have tended to take advantage of the act and of the benefits. They have not been discriminated against in the same manner as this particular class of worker. There are a great many of them who leave employment at various periods, just on a whim, will take periods of leisure, and return again. They are not so penalized. I really cannot let this particular statement go by without making the remark that this is the one class of worker that has had a definite regulation placed against her receiving benefits. I believe it is actually a case of discrimination.


Gordon Francis Higgins: I want to ask the minister one question, but I find no item to which I can specifically relate it, except the general item. On Tuesday last he was good enough to inform me with respect to the employment of labour at Goose Bay airport, the United States base. He answered the question as reported at page 2980 of Hansard. There is no doubt about the fact that large numbers of men are to be employed on the construction work at Goose Bay airport. The question I want to put to the minister is this. I have been informed, from what I believe is

Supply-Labour
a fairly reliable source, that the United States government plans an expenditure of $200 million for the construction work at Goose Bay airport. I have been further informed that the expenditure by the United States government necessitates or requires by that government an extension of the lease or a new lease of the part of the airport that is being used by the United States forces. The other part of the question, if the minister can or will answer, is this. Is this not the real reason for the agreement by the United States government to the changes in the agreement with regard to United States bases in Newfoundland?


Milton Fowler Gregg: I think I shall have to take that as notice of the question. I am sure that my hon. friend would not expect me to answer offhand.


Mr. Hees:: I notice by this evening's press that the national advisory council had a meeting today and that the question of national registration was expected to come up for discussion. Is the minister able to make a statement or to give us some little information as to how the discussion went, or to tell us something about it?


Milton Fowler Gregg: When my estimates were up for discussion previously, I indicated that that was an item on which the council asked that a report be submitted at their next meeting. It is on the agenda of their meetings today and tomorrow. I sat in at some of the meetings today, but a report on that item or on any other item, as a matter of fact, affecting the discussion today has not yet been submitted to me.


Clarence Gillis: The minister put on the record the deliberations of the committee that sat here recently in Ottawa for the purpose of making representations to the unemployment insurance commission. In addition to what the minister has already set out with regard to the controversy about married women, I understand there was another committee from the hospital associations across this country, arguing the question whether hospital employees should be brought in or otherwise. I am wondering if the minister has any information as to the outcome of that particular representation. I know that I have received many letters, as no doubt other hon. members have. I wonder if the minister can bring us up to date on that matter?
While I am on my feet, I should like to support my colleague the hon. member for Winnipeg North Centre. I think if the minister will take a look at the regulation that amended the section with regard to married women, and will read it over, he will have to
'Mr. Higgins.]
agree that the drafting of that regulation leaves much to be desired. For a start, let me read section 5A (1). It is as follows:
Every married woman shall be diso.ualiiied from receiving benefits for the period of two years following her marriage unless she is relieved sooner from any such disqualification as provided in this section.
From reading that you would imagine that because a woman married, she immediately put herself outside the Unemployment Insurance Act. I am sure that was not intended; but that is exactly the interpretation that I would give this section. Then when you go on and find what has been added to that particular clause, while the minister's explanation that he read into the record sounds rather plausible, it certainly makes it exceedingly ambiguous and, in my opinion, does not change the thing at all. You would be led to believe that the reasonable thing to do would be to decide that if that woman retained her employment for sixty days, as is provided now in the proposed amendment, she would then be eligible for unemployment insurance. But that is not the case. In the second amendment to that particular section, it is definitely stated that she has to prove her right to unemployment insurance by working. If she is working she does not want unemployment insurance. I think the whole thing is badly worded.
I have a fairly good idea of what the department is trying to get at, and I am sympathetic with the objective. But I do not think the minister has overcome the difficulty either in this amendment that I have here or even by the one he read into the record. All that has been done in what he has read into the record is to lower the number of days that she has to be working. It was ninety days. The act has been amended by bringing the period down to sixty days. But that amendment still means that she has to prove her eligibility for unemployment insurance by working. That is nonsense. I think that someone should take hold of this provision and write it in a plain and simple manner. I think if a woman is working for a firm, or is a stenographer for the government and wants to get married, she should not have any trouble in getting time off, coming back to her employment and continuing it. But according to this section here, the fact that she got married immediately constitutes a separation from her employer. I do not think that is intended; but that is exactly how it can be interpreted and is how it is in fact being interpreted in a great many cases. I still think that the minister's proposed amendment does not clean the thing up.

I wonder if the minister could bring us up to date on what was done about the representation of the hospital associations across the country in the matter of bringing hospital employees in?


Milton Fowler Gregg: As I said before, I think we might leave the suggested changes to the regulations with regard to married women, for further study on the part of all of us; and I will promise to bring the matter up again under the unemployment insurance item. This has been a week of conferences. It is true that the commission has also been meeting representatives of the hospital associations of Canada. I have here a brief statement. I know that a number of members have had telegrams, and that some hospitals have been worrying for fear that there was an attempt on the part of the commission to put the main part of the hospital staff under the regulations.
The unemployment insurance commission had a meeting on May 16 with representatives of hospital associations, other charitable organizations and the principal labour organizations to receive their views on its proposals for extending unemployment insurance coverage to some classes of employees in hospitals and charitable institutions.
The proposals made a year ago had been modified and it was suggested that only the administrative and maintenance workers be insured. Most of the persons in these groups were in occupations where they are normally insured when in industry. The commission did not propose to insure medical, nursing or technical staff. Clergymen and members of religious orders would of course remain noninsurable also.
Briefs were received from thirty-eight organizations and individuals. Fourteen supported the proposal. Twenty-four were opposed.
The hospital associations stated that they were in favour of unemployment insurance but could not support the proposal at present because of the additional cost. They saw no way of meeting this except by passing it on to the patients or curtailing their services.
The labour organizations felt that as most workers in hospitals and charitable institutions were in the lower paid groups, and as the turnover was fairly high, it was important that those in occupations where they would normally be insured elsewhere should not suffer an interruption of insurance when employed in similar occupations in hospitals and charitable institutions. They were therefore anxious to see at least the non-professional and general labour groups insured.
Supply-Labour
I might add here, those in small or medium-size hospitals are not very many, elevator people perhaps, some people on the office staff, carpenters and so forth.
The commission stated that it would give consideration to these representations before any action was taken. It might be possible to make further modifications in its proposals so as to provide insurance for the most vulnerable groups without making too serious an increase in costs.
I can assure hon. members that no drastic action is being taken. The matter is being explored very carefully in the light of all the representations that have been received.


Charles Edward Johnston: Is the government planning to bring in an amendment to the act to cover these hospital workers? The minister said that no drastic plan is going to be introduced to cover all the workers.


Milton Fowler Gregg: We would not have to amend the act to do this. If the hospitals want half their employees or any number of their employees insured, we could easily extend the regulations to do it. We do not have to amend the act to do that.


Charles Edward Johnston: I understand it could be done by changing the regulations rather than by an amendment to the act. But as I understood the minister's remarks, he said that preparation was being made to introduce regulations to cover some of these employees. Is that right?


Milton Fowler Gregg: Yes, but we do not want to do that if the hospitals say they cannot afford to do it. That is the crux of the whole thing; and all the protests and telegrams that hon. members have been receiving this past week -I have received one or two myself-have been from hospital administrations who are fearful now. They are being strained to the limit, and they are fearful that this might be beyond their means. So it is out of consideration to hospitals' administration that we are only considering this at this juncture for those people who are described here as the "most vulnerable employees".


Charles Edward Johnston: Just a word on the point that the minister raised. He says that he does not want to do anything that will be an added cost to the hospital. In the presentations which were received from the hospitals their main argument is that they do not want all these employees brought in. In fact they do not want any in the institution brought in, because it would be an added cost to them, and their budgets now are overburdened. In my judgment that should not be a consideration. Certainly these people whom the minister indicated, like carpenters,

Supply-Labour
the elevator workers, the charwomen and dishwashers, and such people as those, have a right to protection other than for charity's sake.
What is to be the condition of those people amongst whom, as the minister stated, and I think rightly so, there is a great turnover in employment? They work probably only four or five months and then they are kicked out and somebody else is brought in. I do not think we can just disregard these working people who are employed by the hospitals. We cannot just disregard them and say, we are not going to give you unemployment insurance protection because if we did it would break the budget of the hospital. Do not forget that the hospitals are not charity institutions. I have had a little experience with them, and I know that you pay for what you get from a hospital. Do not make any mistake about that.
If they cannot raise enough money in their ordinary budget to safeguard these working people-and I am not including the nurses who are in training or the doctors who have just graduated from medical school, and are working as internes-if they cannot raise enough money from their ordinary revenue they will have to get assistance from the federal government or the municipalities, but that should not be used as an excuse to disregard these people and kick them out from under the protection of unemployment insurance. The minister should give that very careful consideration. These people in that labour category who may be fired today or tomorrow or next month should have some protection from unemployment insurance.


Robert Ross (Roy) Knight: The minister mentioned that he has received many representations from both sides of the oase. Would it be correct to assume, as the hon. member for Bow River has assumed, that most of the representations received from management were in favour of one side of the case, while most of the representations received from the classes of workers which he described are all on the other side? Would that be a correct picture of the situation?


Milton Fowler Gregg: Because of the fact that I knew it was a live topic I violated the committee rules by putting it on the record. I hoped that it would not be debated in detail, but since I have answered the other questions I shall answer this one. The carpenters, for example, would be represented by virtue of the fact that the unions were represented at the hearings with U.I.C. this week. I would hope that this general item might pass tonight so that we could get on item by item at the next sitting.
IMr. Johnston.]


Louis-René Beaudoin: Is it not a fact that the general discussion has been over for half an hour? These unemployment insurance matters could be discussed on item 201 and others. If hon. members would accept the suggestion made by the minister, we could pass the first item now, and the other questions relating to unemployment insurance could be asked on item 201.


Ellen Louks Fairclough: I am as anxious to see this item passed as the minister, but I do have a specific question that I wish to ask on these estimates. I have a question to ask in regard to printing of departmental reports and other publications, as appears on page 217, and also the following item, newspaper, radio, film, displays and other publicity. The amount estimated is $8,500 less than last year in the one instance and some $14,500 in the other; in fact, a total of $23,000 less in these two items. I notice there are 13 fewer employees for the current year than last year. Is there any relationship between these two facts; that is, that there are 13 fewer employees and that the amounts in these two items mentioned are considerably lower than those of last year? What is the nature of the reports, and so on, that have been discontinued to effect this saving?


Milton Fowler Gregg: There have been no reports of any moment that have been discontinued. Savings have been made on existing reports by making them not so elaborate and by cutting down on the cost. The 13 fewer employees in the grand total has no extraordinary relation to this item.


Robert Fair: What I have to say will take one or two minutes. The minister has pointed out that 38 briefs were presented to the unemployment insurance commission. Fourteen of these wanted the hospital employees included, and 24 were against it. A year ago when an attempt was made to bring hospital employees under the unemployment insurance scheme I had representations from every hospital within the Battle River constituency and many objections were sent by all of them. All of them wanted to be excluded from the unemployment insurance.


Milton Fowler Gregg: Excluded or included?


Robert Fair: Excluded from the unemployment insurance commission, and I have not had any indication that they have changed their minds since. Since they have individually, in most -cases, asked to be excluded, I do not feel at this time that heavier expenses should be imposed on them.


[Stage Direction]
Item agreed to.
Progress reported.

Alphonse Fournier: On Monday we will
proceed with government notice of motion in the name of the Minister of Labour. Before taking up the resolution in the name of the Prime Minister we will consider Bill No. 285, to amend the Canadian and British Insurance Companies Act. This bill has come back from the banking and commerce committee and the Minister of Finance tells me that he is anxious to have it passed as soon as possible. After that we will take up the resolution in the name of the Prime Minister referring the Torquay agreements to the standing committee on banking and commerce. When those matters have been disposed of we will move to go into committee of supply and call three departments, finance, national health and welfare and
Business of the House
mines and technical surveys. If there is time left we shall take up Bills Nos. 191 and 192.


Stanley Howard Knowles: When we go into supply are you just opening the departments?


Alphonse Fournier: Just opening the
departments.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[The following item was passed in committee of supply]:

[Stage Direction]
A-Department-
General administration'-
185. Departmental administration, $558,397.
3209
[Stage Direction]
Monday, May 21, 1951
Ighe house met at three o'clock.


Louis Stephen St-Laurent: Mr. Speaker, on May 14 the hon.
member for Rosetown-Biggar asked the following question, as reported at page 2980 of Hansard:
Will the government comply with the recent request . . . for the introduction in both houses of parliament this session of a resolution approving the inclusion in the Canadian constitution of a declaration of human rights and liberties, and that pending appropriate legislation such approval should affirm parliament's acceptance on behalf of Canada of the United Nations declaration of human rights?
The question asked by the hon. member divides itself into two parts.
The first part refers to the inclusion in the Canadian constitution of a declaration of human rights and liberties. This would require an amendment of the constitution affecting both the federal parliament and the provincial legislatures.
Under the present procedure such an amendment would have to be made by the parliament at Westminster, and this government would not recommend an application for such action by the parliament at Westminster without the consent of the provincial legislatures or governments.
The federal government is now discussing with the provincial governments the establishment of a satisfactory procedure to have future amendments to the constitution made by Canadian authorities here in Canada, and while these discussions are proceeding this government does not intend to initiate discussions about a matter like that referred to in the question, which is apt to be quite controversial and might retard the solution of the question relating to the establishment of a satisfactory procedure to make future amendments here in Canada.
As for the second part, the Canadian government has already, through the affirmative vote of the Canadian delegation in the general assembly of the United Nations, accepted the universal declaration of human rights as a general statement of principles to which we subscribe. Before the vote was taken on the declaration, the Canadian delegation stated that it had various reservations 80709-205J
on details of the text. The head of the Canadian delegation added that certain important aspects of the declaration were within the field of provincial jurisdiction, and that in regard to any rights defined in the document the federal government did not intend to invade that field of provincial jurisdiction.
Now, since this universal declaration of human rights is not a legal instrument, the government does not propose to ask parliament, in advance of the submission for signature of the proposed convention on the same subject which is now under consideration by the United Nations, to endorse the approval expressed by Canada through its delegation.


Major James William Coldwell: I thank the Prime Minister
for his extended reply. I should like to ask him, however, if he does not think that a resolution of both houses affirming parliament's support of this declaration would be of much value to those who are working for similar declarations in other parts of the world.


Louis Stephen St-Laurent: I should not like to
express any opinion as to what its value might be to those who are working for similar declarations elsewhere, but I would fear that that kind of declaration here would make it more difficult to proceed in the calm attitude which has been maintained up to the present time in our own efforts to secure agreement on a proper form to amend our own constitution in Canada.


Mr. Graydon:: I should like to ask the
Prime Minister if any other legislative bodies have endorsed the universal declaration of human rights.


Mr. Si. Laurent:: I would not like to give
a snap answer to that question, I will ask that the records of the United Nations in that regard be examined, and try to get the information for the hon. member.



PAGE BOYS


Daniel (Dan) McIvor: Mr. Speaker, the holiday that was arranged for the page boys was made possible by the dollars contributed by hon. members of this house, and I should like to thank those who helped bring this affair to its happy conclusion.

Post Office Act
Those who provided their own cars and drove the boys to Montreal included the hon. member for Norquay (Mr. Wood), the hon. member for Jasper-Edson (Mr. Welbourn), and the hon. member for Ottawa West (Mr. Mcllraith), as well as Mr. Levesque, a member of the staff of the house.
I wish to thank four hon. members for the arrangements they made in Montreal. I refer to the hon. member for Papineau (Mr. Houde), the hon. member for St. Ann (Mr. Healy), the hon. member for Notre Dame de Grace (Mr. Whitman), and the hon. member for St. Mary (Mr. Dupuis). Mayor Houde went all out to show the boys of this house a good time. He knows how to treat a boy and give him what he likes.
The trip was arranged by the Clerk of the House and the Sergeant-at-Arms, and the boys were in charge of the chief page, who handled them like a veteran. Tonight, Mr. Speaker, you may go home feeling happy that the page boys have been treated by the members of this house as members in good standing of the family of the House of Commons.



POST OFFICE ACT


Hon. Edouard Rinfrei (Postmaster General) moved: for leave to introduce Bill No. 322, respecting the Canada Post Office.


Some hon. Members:: Explain.


Édouard-Gabriel Rinfret: I should first say that there has been no revision of the Post Office Act since chapter 161 of the 1927 revised statutes, which at the time was little more than a consolidation of chapter 66 of the revised statutes of 1906 and the relatively few amendments enacted during the intervening twenty-one "years. As a matter of fact, with the exception of a few amendments relating to the appointment of personnel under the Civil Service Act and to certain changes in rates, most of the provisions of the 1927 revision are the same as those found in chapter 35 of the 1886 revised statutes, and in the old Post Office Act of 1867.
The purpose of the present revision is to consolidate and codify all legislation relating to the activities of the Canada post office, to bring old and new provisions in line with present practices and conditions; to simplify and clarify sections where necessary; to eliminate redundant and unnecessary sections, and to improve the general style and arrangement by reducing the law to a systematic form.


Mr. Ferguson:: Would this not be a good time to renovate all departments of the government?
(Mr. Mclvor.]


George Alexander Drew: Perhaps this would be the proper time to ask the minister if in the amendments he is presenting he has included a provision which will bring to an end inequalities in postal rates within a single community.


Édouard-Gabriel Rinfret: I have already told the leader of the opposition that when the legislation is introduced it will speak for itself.


George Alexander Drew: That is not an answer.


Gordon Graydon: Is it the intention of the minister to permit this bill to go to a special committee which will deal with postal
matters?


Édouard-Gabriel Rinfret: The government has considered the advisability of sending this bill to a special committee, but feels that no reasons have been advanced which would warrant a departure from the ordinary procedure of having the bill discussed in committee of the whole.
Motion agreed to and bill read the first time.



QUESTIONS


HOUSING


Mr. Noseworlhy:: 1.	Did Wartime Housing or any other government agency build a number of houses in or adjoining the city of Welland, between 1939 and 1945?
2.	If so, what type of houses were built?
3.	How many of each type were built?
4.	What was the total cost of each type per house?
5.	Have any of these houses been sold?
6.	If so, how many?
7.	What was the selling price of each type per house?


Mr. Winters:: 1.	Yes; Wartime Housing Limited built 757 housing units in or adjoining the city of Welland between 1939 and 1945; 360 in the city of Welland and 397 in the township of Crowland.
2. Three types of houses		were built:
4-rooms, regular;	4-rooms, large;	and 6-rooms.3.	City of	Township ofWelland	Crowland4-rooms, regular	
233	3284-rooms, large . .	
23	6-rooms	
104	694.	City of	Township ofWelland	Crowland4-rooms, regular	.. .$3,569.50	$3,350.294-rooms, large ..	3,911.05	6-rooms 	. . . . 4,413.94	4,180.935.	Yes.6.	577, as of April 30, 1951.
City of Welland
4-rooms, regular ,$2,750-$2,875 4-rooms, large . . .$2,900-$2,950 6-rooms	$3,450-$3,550
Township of Crowland $2,300



$3,000 FISHERIES PRICES SUPPORT  NEWFOUNDLAND

Mr. Browne (St. John's West):: 1.	How many quintals of Labrador fish were purchased under the guarantee of the fisheries prices support board in Newfoundland in 1950?
2.	What was the total amount paid?
3.	How much of this fish has been sold, and what returns have been received?


Mr. MacNaught:: The fisheries prices support board advises that precise answers cannot be given to these questions until the audit has been completed after all fish has been delivered, packed and sold or otherwise disposed of. It is understood that small quantities caught too late last season to be brought down from Labrador before the freeze-up are only now being shipped south.
1.	It is estimated that 133,000 quintals of Labrador fish will have been covered by the guarantee during the marketing year ending June 30, 1951.
2.	The estimated total cost of the 133,000 quintals, including inward freight, handling, drying and packaging is approximately $1,700,000.
3.	To date, 104,000 quintals have been sold commercially for approximately $1,080,000; sales to relief agencies of 26,100 quintals returned approximately $246,000. Existing inventory is estimated at 2,900 quintals.



NO. 2 TEMPORARY BUILDING, OTTAWA

Mr. Lennard:: 1.	What contracts were let for the renovation of No. 2 temporary building, 70 Lyon street, Ottawa, Ontario?
2.	Were these contracts cost plus or otherwise?
3.	What was the cost of same?


Mr. Fournier (Hull):: 1.	Painting and decorating of offices of Department of Defence Production.
2.	Cost plus fixed fee.
3.	Approximately $35,000, including fixed fee.



FISHERIES


Mr. Higgins:: 1.	What was the price guaranteed to the fishermen for each type of cure of the Labrador codfish production for 1950?
2.	Were the fishermen entitled to any allowances in addition to the set price?
3.	If so, what are the particulars of such allowances?
4.	Was the price computed on the fishermen's estimated cost of production?
Questions
5.	If not, on what was the price based?
6.	What were the arrangements made with exporters or others for handling the fish produced by the fishermen?
7.	If handling charges were allowed exporters, what were these charges?
8.	Were the allowances made to fish exporters or others for handling the 1950 production of Labrador salt codfish based on the exporters' estimate of cost?
9.	If not, what was the basis of those handling charges?


John Watson MacNaught: The fisheries prices support board advises as follows:
1. Semi-dry, $7.00 per quintal (112 lbs.); ordinary-cure, $7.00 per quintal (112 lbs.); salt bulk, $5.50 per quintal (140 lbs); cullage, $3.00 per quintal (112 lbs.).
Note: Consideration of a differential between ordinary cure and semi-dry will be given when the review of the full year's operation under the guarantee takes place.
2.	Yes, certain transportation charges.
3.	(1) On fish produced by stationers and permanent Labrador residents, transportation charges from northern points to merchants' premises in Newfoundland were allowed as follows:
(a)	north of Domino, $1-75 per quintal;
(b)	Domino and South Labrador, $1.50 per quintal; (c) north of Goose cape and Flowers cove in Newfoundland, $1.25 per quintal. (These rates include collection, handling, freight and insurance).
(2)	On fish produced by floaters, transportation charges from home port to port of sale were allowed at 50 cents or 25 cents per quintal, depending on distance between ports, at the discretion of the Newfoundland fisheries board and provided that the fish was transported in the producer's vessel.
(3)	Actual freight charges to fishermen who delivered their fish to Newfoundland ports by regular shipping services.
The effect of these allowances was that all fishermen received the appropriate guaranteed price at his home port.
4.	Yes, in so far as information on such costs was available.
5.	Another consideration was the estimated return to fishermen from such export sales contracts as had been arranged prior to the guarantee.
6.	(1) Exporters
Newfoundland Associated Fish Exporters Limited (NAFEL), the sole exporter of salted fish from Newfoundland, agreed to act as selling agent for the fisheries prices support board, for a provisional commission of three per cent of the f.a.s. sales value, subject to final determination on the basis of NAFEL's

Questions
ultimate charge to its own members for handling 'shore' fish of 1950 production.
(2) Merchants
(a)	The following costs, f.a.s. bulk per quintal, for the handling of the fish including labour, overhead, cartage, wharfage and shrinkage, by areas, were allowed: St. John's $2.43; Bonavista $2.07; Conception bay $2.32; north of Cape Bonavista $1.92.
(b)	Where special drying was ordered by NAFEL to meet the requirements of certain markets, charges were allowed covering costs and loss in weight, as follows:
	St. John's	Outports
	$ per qtl.	$ per qtl.
Semi-dry to bard dry.. Ordinary cure to	2.02	1.73semi-dry 	
Ordinary cure to	1.78	1.49hard dry 	2.92	2.63Ordinary cure to	.40 per cent	2.20	1.91Semi-dry to 40 per cent	1.46	1.17(c) Packages were to be paid for	ini accordance with established rates.(d)	Freight costs were to be allowed for transportation from licensed packers to point of export and to another point of export, if necessary.(e)	Storage charges were to be determined by NAFEL and the Salt Codfish Association, subject to approval of the Newfoundland fisheries board.(f)	In certain special cases, a charge for brushing fish will be allowed, subject to approval of the Newfoundland fisheries board, at cost.(g)	in certain special cases on fish brought in to St. John's from outports, an allowance will be made to cover storage and handling charges in taking fish in and out of store and cartage Where necessary to export vessel, subject to the approval of the Newfoundland fisheries board.7.	Answered by No. 6.8.	No.9.	(1) Exporters: The final commission to NAFEL will be based on actual costs incurred.
(2) Merchants: Allowances were agreed by negotiation between representatives of the fisheries prices support board and the Newfoundland Salt Codfish Association and were based on average costs determined through prior investigations conducted by the Newfoundland fisheries board.



HEALTH AND WELFARE


Mr. Cleaver:: Has the Department of National Health and Welfare taken any measures with respect to influenza in Canada?


Mr. Martin:: A national influenza centre has been established at the laboratory of hygiene with an advisory committee composed of a number of experts in virus diseases.
This centre is working in close co-operation with the world influenza centre in London, England, with the virus research centre at the Connaught Medical Research Laboratories at Toronto, and the regional centres in the United States, and exchanges with them the latest information on current epidemics and the development of new vaccines.
During the recent epidemic, our national influenza centre, in collaboration with the departments of health of all provinces, isolated and identified the influenza virus causing the epidemic. Comparative studies of this strain of virus revealed that it was identical with the strain which caused the recent epidemic in England.
In close co-operation with the American advisory committee on influenza, the problem of the efficacy of influenza vaccines was carefully studied in selected groups during the recent epidemic. These studies indicated that the older vaccines which were commercially available had little protective effect in this particular outbreak and newer improved vaccines are now being developed.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Smith (Queens-Shelburne):: 1.	During each of the last ten years (a) what quantities of cranberries were imported by Canada from the United States; (b) what was the estimated production of Canadian cranberries?
2.	During each of these years, what was the average wholesale price of (a) Canadian cranberries; (b) imported cranberries?
3.	What was the average wholesale price on the New York market during each of the years 1948, 1949 and 1950?
4.	What protection is now given Canadian cranberry producers against the imports of United States cranberries?
5.	Has there been any change since 1940 in this protection? If so, what is the change?


C. D. HOWE COMPANY LIMITED
Mr. Balcer:: 1.	During the years 1935 to 1951, inclusive, in respect of what projects has the firm of C. D. Howe Company. Limited, been retained by the government of Canada, by any department thereof, by any dominion crown company, or by any other agency, board or commission to (a) prepare plans and/or

specifications; (b) supervise construction; (c) assume responsibility for any other work or service?
2.	In respect of any such work or service, (a) in what cases were tenders not called for; (b) in what cases, where tenders were called for, were lowest tenders not accepted?
3.	On what basis were fees or other remuneration paid to the said company for such work and services?
4.	What was the total amount of fees and remuneration so paid?
5.	What is the total amount of fees and remuneration under contract and not yet paid?


COST OF CANADIAN REPRESENTATION AT INTERNATIONAL CONFERENCES
Mr. Fulton:: 1.	What was the total cost to Canada of representation at each of the 168 conferences listed in appendix B to the report of the external affairs department for 1950, exclusive of the salaries of permanent employees who attended as Canadian representatives?
2.	Of the total cost, how much in each case was for (a) travelling expenses; (b) accommodation and allowances, whether living allowance or otherwise, while the conference was in session; (c) salaries and wages of such special assistants, secretaries, clerical help and advisers as were employed especially for the particular conference?
3.	What was the total number of personnel, including those mentioned under 2(c), attending or assisting in any capacity at the conferences themselves?



LABOUR CONDITIONS


Alphonse Fournier: That it is expedient that the houses of parliament do approve of convention No. 58, fixing the minimum age for the admission of children to employment at sea (revised 1936) adopted by the general conference of the international labour organization at its 22nd session at Geneva on the 24th day of October, 1936, as modified by the final articles revision convention, 1946, and that this house do approve of the same.


Mr. Paul E. Cote (Parliamentary Assistant to the Minister of Labour):: Mr. Speaker, the purpose of this resolution is to obtain approval by parliament of a convention passed by the general conference of the international labour organization at Geneva at its 22nd session, October 24, 1936. Upon approval of its terms by parliament the government proposes to proceed to the ratification of the convention.
Convention No. 58 provides that children under the age of fifteen years shall not be employed for work on vessels other than vessels upon which only members of the same family are employed. There are two exceptions in the convention to this general provision. First, national laws may provide for the issue, in respect of children not less than fourteen years, of certificates permitting them
Labour Conditions
to be employed in cases in which an educational or other appropriate authority is satisfied, having due regard to the health and physical condition of the child and to the prospective as well as the immediate benefit to the child of the employment proposed, that such employment will be beneficial to the child. Second, the provision does not apply to work done by children on school ships or training ships, provided that such work is approved and supervised by public authority.
This parliament has already approved the principle contained in this convention, and has given effect to it by an amendment to the Canada Shipping Act contained in chapter 35 of the statutes of Canada, 1948, repealing the former section 279 of the said act, and substituting therefor a new section 279 which provides that no person under fifteen years of age shall be employed on any vessel, subject to specified exceptions which correspond to the exceptions contained in convention 58, which I have outlined above.
It will be evident that Canada is already in full compliance with the provisions of this convention, and that no new legislation is required for this purpose. The convention has been ratified by ten other countries, namely, Belgium, Brazil, Bulgaria, France, Iraq, The Netherlands, New Zealand, Norway, Sweden, and the United States. Canada ratified; an earlier ILO convention No. 7, in March, 1926, fixing the minimum age for admission of children to employment at sea at fourteen years of age. This convention is in fact a revision of convention No. 7.
Perhaps I should explain just what obligations follow upon the ratification of an ILO convention by a member state of the ILO. When the ratification has been communicated to the director of the international labour organization, the ratifying state is required to take such action as may then be necessary to give effect to the provisions of the convention by the enactment of legislation or otherwise if this has not already been done. Each of the member states ratifying the convention agrees to make periodic reports to the international labour office on the measures which it has taken to give effect to the provisions of the convention.
In effect, therefore, a member state ratifying a convention assumes the obligation that the provisions of the convention shall be given continuing effect, in that its legislation and practice on the subject matter of the convention provide labour standards on a level at least as high as the standards established by the provisions of the particular convention.

Labour Conditions
I therefore recommend to the house the adoption of this resolution.


Gordon Francis Higgins: Mr. Speaker, I do not propose to delay the house at all on this matter. I imagine that will be welcome news. I have listened to the parliamentary assistant, and I have had the opportunity of studying the proposed resolution. It certainly appears to be one which should have the full commendation of the house. I understand that the principle has been endorsed already by some ten or eleven nations. It was adopted in 1936, and modified by the final articles revision convention in 1946. As all members are aware the ILO is now one of the specialized agencies of the United Nations, and I feel that as such any recommendation of this kind will have the general support of this house. I am sure that no hon. member wants to have children exploited as they have been in the past, and any measure to prohibit such exploitation is bound to have the approval of all hon. members.
There is one question which occurs to me, but I am sure there is a good explanation for it. I understand that the provision under family allowances is that the children must attend school until they are sixteen years of age, otherwise family allowances are not forthcoming. I presume the obvious explanation is that if children are working before they are sixteen-this measure provides that they may work after fifteen- there will be no need for family allowances. I suggest that is the only question about which there may be any doubt. Other than that, I see no reason why passage of this particular resolution should be delayed, and it should receive the wholehearted support of the house.


Angus MacInnis: Mr. Speaker, I am sure that all members of the house will welcome the ratification, not only of this convention but of any other ILO convention, because the purpose is to improve the conditions of those who make their living by working for someone else. I believe this convention came into effect first in 1939, after it received* ratification by two members of the ILO. At this distance I could not hear everything the parliamentary assistant said*, but I was wondering why the 1936 convention was not ratified by this parliament. I am just wondering why ratification has been delayed until this late date.
The parliamentary assistant said that the terms of the convention are perhaps not as good as the provisions of the Canada Shipping Act. While that may be true, I think most of us have had sufficient experience with conventions of this kind to realize that

the terms of the convention do not mean very much. Unless there is adequate inspection to ensure that the convention is carried out, it may be only so many words on paper. I should like to have heard the parliamentary assistant explain the inspection provisions under the Canada Shipping Act which make sure that persons under fifteen years of age are not employed on any vessel except in conformity with the exceptions made in the convention. In this regard I would draw the attention of the house to a press release issued by the Department of Labour on February 8, 1951. The release was received from the ILO in Geneva, and concerns the health and welfare conditions of seamen who travel from port to port in various parts of the world. Their health conditions, the release pointed out, are such as to be a threat to the maritime nations as well as to the seamen themselves.
There are several conventions-I do not know whether we have ratified all of them -dealing with conditions on board ship and the health of seamen. Evidently they have been ratified by other maritime nations, and perhaps by our own. According to the press release I referred to, the enforcement of these conventions still leaves a great deal to be desired. I believe that this resolution should have been moved at a time when the house could go into committee, so that we could obtain information from the Minister of Labour and his experts as to how these conventions are carried out.


Ellen Louks Fairclough: Mr. Speaker, I should like to ask the parliamentary assistant whether in article 2, clause 1, which prohibits children under the age of fifteen from being employed, on vessels other than vessels upon which only members of the same family are employed, there is a loophole whereby children may be taken from school to work with their own family when they are under the age of fifteen. It is not very clear. Probably our own law is more explicit in that regard. I should like to know whether or not that is the case.
In clause 2 of the same article, reference is made to "national laws or regulations," and in the fifth line it reads: "appropriate authority designated by such laws or regulations is satisfied." Does that refer to national laws, or to the fact that provincial and local authorities have the sanction of national authority to issue these certificates?-as has been the case, of course, in Ontario with respect to children leaving school for employment other than on vessels.


Clarence Gillis: Mr. Speaker, I have no intention of arguing

the merits or demerits of the resolution, but I should like to point out to the parliamentary assistant that this is a resolution which definitely should go before the committee on industrial relations. There is no hurry about this convention decision. It has been standing since 1936.
From listening to the parliamentary assistant I gained the impression that there is a reservation implied in this resolution as to the decision of the conference to exclude from the age limit laid down by the convention children employed on vessels on which only children of the same family are employed. I do not agree with that. I think it conflicts with the general principle of the resolution. In other words, the father, if he is so minded, can put the children, at ten years of age, aboard a vessel and thus exploit the family, ignoring much of the legislation that we have today with regard to what the province considers to be a proper educational standard before employment is permitted.
Some of the provinces have already established, for work purposes, a definite age limit. This convention decision is cutting right across provincial legislation, and I do not like the reservation that permits the father to exploit the family. The implications of this convention decision are sufficiently serious to justify reference of the resolution to the committee on industrial relations, so that we may at least gain a thorough understanding of what we are doing in accepting the proposal that is now before the house. I therefore move:
That this resolution and the subject matter thereof be referred to the standing committee cn industrial relations for investigation and report.


Louis Stephen St-Laurent: Mr. Speaker, I think the apprehensions of the hon. member who spoke last (Mr. Gillis) are not well founded. This exception in the convention would not override any legislation, whether federal or provincial. All that we undertake is that we will not have anything less stringent than what the convention provides. There are provincial regulations with respect to the obligation of parents to have their children attend school, and the exception contained in the convention would not override those regulations but would merely make it an obligation upon us, in the exercise of such jurisdiction as we may have, to endeavour to have the convention complied with. These international labour organization conventions require us to do everything within our jurisdiction that is necessary to compliance with them, and to use our best endeavours to get the other authorities who may have jurisdiction on any subject matter also to comply. But
Labour Conditions
the purpose of these conventions is merely to establish a minimum which the signatories are obliged to comply with; there is no implication that they cannot do more if they feel that more is better suited to the situation of their own country.
I do not think there can be any serious objection to having the resolution go before the industrial relations committee, if hon. members generally feel that they would like to discuss it there with the Minister of Labour or the officials of his department. By our own legislation we do more than is required by this convention; and the purpose of the ratification, as was suggested on another matter by the hon. member for Rosetown-Biggar (Mr. Coldwell), is to assist the officials of the international labour organization to get an agreement from others who may not be doing as much as we are doing. If there is any desire to have the matter considered in the committee on industrial relations, the government would have no objection to that being done. I do not know that it is necessary; but if the hon. member insists on his amendment, the government will offer no objection.


Clarence Gillis: So far as I am concerned, Mr. Speaker, I would still like to see the resolution go before the committee. I think it would be an education for a great many of us to meet with the officials and to discuss this particular form of legislation.


Gordon Graydon: Mr. Speaker, may I just make one or two observations in connection with this proposal? As to a number of these conventions which arise out of the deliberations of the special agencies of the United Nations and of international organizations, it seems to me that a procedure such as that which has been recommended by the hon. member for Cape Breton South (Mr. Gillis) ought to be followed. When the conventions come before parliament, they come in the form of a resolution, and there is no opportunity in committee of the whole to interrogate anyone in the government; they sometimes also come in fairly detailed form, as does this convention. On previous occasions, when resolutions of a detailed nature of this kind have been before the house, I have felt that proper provision is not made under the rules for a proper and full discussion unless the matter goes before a special committee of the house.
When the parliamentary assistant rises to answer the questions that have been put to him during this short debate, perhaps he might indicate why we have delayed so long, a circumstance which was mentioned by the hon. member for Vancouver East (Mr. Maclnnis). If it was a good convention-and I agree that it is-surely it should have been

Labour Conditions
approved long ago. Delaying action of this kind only indicates that this parliament may have had some doubt as to the principle of it, and I think that any such doubt should have been removed long before now.
In addition we ought to know from the parliamentary assistant the dates upon which these various nations officially ratified the convention. That would indicate how far we are behind, or whether we are only keeping abreast of some other slow people in other parts of the world.


Mr. Speaker:: Is the amendment in order?


Some hon. Members:: No.


Stanley Howard Knowles: Yes.


Gordon Graydon: Yes, it is, Mr. Speaker.


Stanley Howard Knowles: Standing order 50.


Mr. Speaker:: The motion of the hon. member for Cape Breton South is that the resolution and the subject matter thereof be referred to the standing committee on industrial relations for investigation and report. Citation 375 of Beauchesne's Parliamentary Rules and Forms, third edition, reads as follows:
It is net an amendment to a motion to move that the motion go to a committee.
There is also a ruling on page 604, as follows:
Mr. Woodsworth, seconded by Mr. Garland1 (Bow River) moved:
That in the opinion of this house, Canada should refuse to accept any responsibility for complications arising from the foreign policy of the United Kingdom.
And a debate arising thereon;
Mr. Bourassa, seconded by Mr. Spencer, moved in amendment thereof: That the question be referred to the select standing committee on industrial and international relations for consideration and study with power to invite expert advice: such committee to report to the house during the present session.
Mr. Meighen raising a point of order on the ground that the proposition was not an amendment, said:
1 do not rise to address the house on the motion, nor yet on the alleged amendment, but to take exception to the amendment as no amendment at all. It is not an amendment to a motion to move that the motion go to a committee.


Gordon Graydon: Could we not agree on this?


Mr. Speaker:: With the unanimous consent of the house there is no doubt that the motion could stand, but I am doubtful whether the motion in its present form is in order. Is it the unanimous consent of the house that the resolution should go to a committee?


Mr. Sinnolt:: No.


Stanley Howard Knowles: May I point out that when the hon. member for Cape Breton South (Mr. Gillis) moved his motion, as I understood it, he moved it not as an amendment but as a
IMr. Graydon.]
motion. I submit that that is the point in the ruling that Your Honour has just read from pages 604 and 605 of Beauchesne's third edition. The whole point made by Mr. Meighen was that the proposition being put forward at that time was not an amendment. It was a motion, and that is what is now before us. I submit it is the kind of motion that is provided for by standing order 50, which reads as follows:
A motion to refer a bill, resolution or any question to the committee of the whole or any standing or special committee shall preclude all amendment of the main question.
What we have before us from the government side is a resolution, one of the items referred to in standing order 50. My colleague, the hon. member for Cape Breton South, has moved a motion that this resolution be referred to one of the standing committees. Standing order 50 makes it clear that so long as that motion is before the house there can be no amendment to the main question moved on behalf of the Minister of Labour. Certainly standing order 50 makes it clear that while an amendment of this kind might not be in order as an amendment, as a motion it is. That is what my colleague moved.


Mr. Speaker:: I do not see how the hon. member could move a motion at this time without notice.


Edmund Davie Fulton: I have only Beauchesne's second edition before me, but I might point out that citation 49 on page 133 appears to contemplate that the proper time for presenting or making such a motion is the first occasion on which the resolution or matter comes before the house. I read:
All instructions must be moved on the first occasion when the order for the committee on a bill has been read.
It seems to me that since it would not be known on this side of the house exactly when a motion or resolution was coming up for consideration, it would not always be possible by any means to give forty-eight hours' notice of a motion to refer the matter to a special committee; but since such a motion is clearly in order, as provided for under standing order 50, it does seem to me that the requirement of forty-eight hours notice would not apply to the motion now before Your Honour.


Mr. Speaker:: I think the house will agree with me that we cannot have two motions before the house at the same time except in accordance with standing order 48. I think that is clear. In the circumstances, unless there is unanimous consent, I will be

forced to rule the motion made by the hon. member for Cape Breton South out of order. Is there unanimous consent?


Some hon. Members:: Yes.


John Sylvester Aloysius Sinnott: No.


Mr. Speaker:: Is it the unanimous wish of the house that the motion proposed by the hon. member for Cape Breton South be allowed to stand?	,


Some hon. Members:: No.


Some hon. Members:: Agreed.


John Sylvester Aloysius Sinnott: No.


Mr. Speaker:: Since there is not unanimous consent I must rule the motion out of order. Is it the pleasure of the house to adopt the motion?


Mr. Cole (Verdun-La Salle):: Mr. Speaker-


Mr. Speaker:: If the parliamentary assistant to the Minister of Labour speaks now, he will close the debate.


Stanley Howard Knowles: Just before the parliamentary assistant speaks may I express the hope that he will answer some of the questions that have been asked from this side of the house, to which we had hoped we might be able to get the answers in the industrial relations committee. For example, following what the Prime Minister said, we should like to know what the regulations are in Canada at the present time. How much better are our requirements than those in the convention we are now being asked to approve? If possible, I think the parliamentary assistant should give us some detail along that line.


Charles Delmar Coyle: Mr. Speaker,-


Mr. Speaker:: If the hon. member speaks now he will close the debate.


Stanley Howard Knowles: He did not move the motion.


Mr. Speaker:: The question has been raised by the hon. member for Winnipeg North Centre that the parliamentary assistant did not move the motion, but the parliamentary assistant is speaking for the minister who did move the motion. The minister who moved the motion did not speak, and I have ruled on at least one previous occasion that if a parliamentary assistant speaks on behalf of a minister in his opening address, when he speaks again he closes the debate.


Charles Delmar Coyle: Mr. Speaker, in the first instance I wish to tell the mover of the motion which was ruled out of order a minute ago that I had no basic objection to letting the standing committee
Labour Conditions
of the house on industrial relations study this particular convention. But I do wish to remind him that the approval which is sought this afternoon is one after the fact, as compared with the practice of other countries of approving and ratifying a convention before making any necessary readjustments in legislation. As a matter of fact, here in Canada it did happen in 1935 that by exception we ratified a convention before enacting any measure of legislation in compliance therewith. But the house will recall that after three conventions had thus been ratified and later on their provisions had been embodied in measures which this house passed, it turned out that this legislation was ultra vires of this parliament, and that it became null and void. Therefore I think it is a wise course that our country has followed over the years not to ratify any convention before the necessary legislation embodying the terms of the convention has been placed on the statute book. This means that today while we are studying the terms of convention 58 we are asked to consider a matter which parliament approved when it gave consideration to certain amendments to the Canada Shipping Act. The matter has already received approval. I am wondering what purpose would be served if the standing committee on industrial relations, in compliance with the suggestion of the hon. member for Cape Breton South (Mr. Gillis), should go over a matter which has already received the approval of parliament.
The hon. member knows very well that, as a member of the standing committee on industrial relations, he is free at any time to express to the chairman of that committee his desire to have the committee called so that certain matters of concern to him and to the House of Commons generally may be considered.


Angus MacInnis: Mr. Speaker, I rise to a point of order. You have ruled out of order the motion of the hon. member for Cape Breton South, and I suggest the parliamentary assistant should not be allowed to discuss it further.


Paul-Émile Côté: It was not my
intention to do so. I was using the incident only as an illustration.


Stanley Howard Knowles: We will remember that.


Paul-Émile Côté: I have been comparing the course followed in Canada with that followed in other countries in the approval and ratification of ILO conventions. I have concluded that the motion to refer the matter to the standing committee on industrial relations could have served a

Labour Conditions
useful purpose only if the -convention was to be ratified before any legislation was introduced implementing or embodying its terms.
A question was -raised as to the long delay which has taken place between the time of the adoption of the convention by the international labour organization and today, when the approval of the house is sought. Let me point out that conventions of this kind are rairely dealt with by participating governments before the expiry of two or three and sometimes four years.


Gordon Graydon: Why?


Paul Joseph James Martin: There has to be time for study.


Paul-Émile Côté: In this
particular instance, the main cause for delay was the intervening war years 1939 to 1945. As I said in my opening remarks, in 1946 the international labour organization studied and revised the subject matter of the convention. Afterwards it was considered that, in accordance with the policy followed in the past, it would be desirable to wait for the amendment of section 279 of the Canada Shipping Act, so that it might conform with -the terms of -the convention, and that this should be done before the convention would be submitted to the house for approval. I suggest this explains why, despite the original move in 1936, it is only today that the House of Commons of Canada is being called upon to *approve -the convention.
I will not add much more to the debate. The Prime Minister (Mr. St. Laurent) has already answered some of the -questions put by hon. members. Another question had to do with the enforcement of the provision in the Canada Shipping Act embodying the terms of the convention. I would refer the hon. member to article 4 in part I of the first schedule to the Canada Shipping Act, which states:
In order to facilitate the enforcement of the provisions of this convention, every shipmaster shall be required to keep a register of all persons under the age of sixteen years employed on board his vessel, or a list of them in the articles of agreement and of the dates of their births.
Now, to meet the request of the hon. member for Vancouver East (Mr. Maclnnis) I shall be pleased to have prepared, in tabular form or otherwise, a statement showing how far we -are in advance of the strict requirements of the -convention ini this particular field. When the -appropriate item of supply is before the committee I shall be pleased to see that the appropriate document is tabled.


[Stage Direction]
Motion agreed to.
[Mr. Cote (Verdun-La Salle) .1


[Stage Direction]
On the orders of the day:
Robert Ross (Roy) Knight: Mr. Speaker, I should like to ask a question of the Prime Minister, founded on a dispatch of May1 16, which says that one Norman Wright, the Liberal candidate in Winnipeg South Centre, said:
There is a growing conviction among all parties that education in Canada must have federal aid.
Will the Prime Minister say whether the candidate was expressing the -opinion of the government in this connection?


Louis Stephen St-Laurent: The answer, Mr. Speaker, is that this is a free country, and -candidates for election -to parliament express their own opinions and ask, on the strength of their opinions, for the support of the electors.



AUDIBILITY OF DEBATE


[Stage Direction]
On -the orders of the day:
Solon Earl Low: I should like to ask a question of His Honour the Speaker-


Mr. Speaker:: Order. Before the hon.
member asks the question, I would point out that it is not -customary to address questions to the Speaker from the floor of the house. See Beauchesne's third edition, citation 302.


Gordon Graydon: Unanimous consent.


Mr. Speaker:: I assure the hon. member, however, that I shall be pleased to see -him at the very first opportunity and -to discuss with him the matter he has in mind.


Solon Earl Low: Then I shall direct my question to the Minister of Public Works, and ask him to whisper with Your Honour in private. What progress is being made with plans to instal a sound-amplification system in -this chamber? In asking the question I have in mind the splendid report Your Honour presented to the house on March 15, and I am also urged to ask the question because it seems to me -to be getting much more difficult, as the days go by, for those of us in this part of the chamber to hear what is going on in other parts-and this afternoon has been no exception.


Alphonse Fournier: When any hon. member is uncertain as to whom he should address a question, I

am ready to answer to the best of my ability. There was a report read by Mr. Speaker to the house concerning this matter. Discussions have been taking place-if I am not divulging a secret-between Mr. Speaker and certain experts in these matters. I attended one meeting with these gentlemen.


An hon. Member:: As an expert?


Alphonse Fournier: Not being an expert, I learned quite a bit about the proposed system. Mr. Speaker really is the one who has authority over the House of Commons, and I will heartily support any decision that he may make.


Major James William Coldwell: I imagine that the Department of Public Works is involved in this matter, and I should like to ask the minister whether, so far as that department is concerned, the project is being pressed as rapidly as possible? I quite agree with the hon. member for Peace River that at times it is difficult to hear what is being said.


Alphonse Fournier: I would hesitate to put pressure on Mr. Speaker in a matter such as this.


Major James William Coldwell: I was not thinking of Mr. Speaker.



DEFENCE CONFERENCE


[Stage Direction]
On the orders of the day:
Gordon Graydon: In the absence of the Minister of National Defence, who I understand is away on public business, I should like to direct a question to the Prime Minister. Has Canada received an invitation to the commonwealth defence ministers conference to be held in Malta next month?


Louis Stephen St-Laurent: There has been correspondence
between the government of the United Kingdom and the government of Canada in that respect. No decision has yet been reached in the matter, but as soon as one is reached I shall be pleased to communicate it to the house.



TRANS-CANADA HIGHWAY DAWSON ROAD, ST. BONIFACE, TO RICHER, MAN.

[Stage Direction]
On the orders of the day:
Mr. William Bryce (Selkirk):: I should like
to direct a question to the Minister of Resources and Development. Has the government given approval to detailed plans of
Inquiries of the Ministry construction of the trans-Canada highway from Dawson road, St. Boniface, south to Richer, Manitoba?


Hon. Robert H. Winters (Minister of Resources and Development):: I wish to thank the hon. member for giving me notice of his question. The .answer is no.


William Scottie Bryce: Has the minister approved any other plans in eastern Manitoba so far as the trans-Canada highway is concerned?


Robert Henry Winters: To the best of my knowledge, the answer is still the same as the answer I gave the hon. member for St. Boniface a week or so ago, at which time I told him that the plans for the route between Winnipeg and the Manitoba-Ontario boundary had not yet been communicated to the federal government by the provincial government.



MANPOWER


[Stage Direction]
On the orders of the day:
Charles Edward Johnston: In the
absence of the Minister of Labour I should like to direct a question to his parliamentary assistant. Has the minister been informed that today's Citizen contains an article stating that the national advisory council on manpower does not think it necessary to conduct a national registration at this time? In view of the fact this is an important question, would the parliamentary assistant care to make a statement?


Charles Delmar Coyle: I am aware that the Minister of Labour has followed very closely the work of the advisory council on manpower. I would not go any further at this time. I shall be pleased to bring the question to his attention.


George Alexander Drew: In view of the importance that was attached to the appointment of the council at the time it was announced, and in view of the fact that the activities of the council relating to the general problem of manpower affect not only the Department of Labour but the Department of National Defence and the Department of Defence Production as well, will the Prime Minister indicate whether we are to have a report today of the decisions that have been made? If not, when may we have a report that will interpret the decisions reached on Saturday, which apparently are the first definitive decisions following the announcement of the appointment of the council?


Louis Stephen St-Laurent: My understanding was that the committee was to make recommen-

Inquiries of the Ministry dations. Those recommendations have not yet reached the government, and 'the government necessarily has not made any decisions upon them. As soon as a decision is made it will be announced to the house.


Gordon Francis Higgins: I should like to ask a supplementary question. The first paragraph of the official release of May 19 reads as follows-


Mr. Speaker:: Order. Perhaps I should have interrupted other hon. members. I think hon. members realize that they should not read dispatches at this time. Will the hon. member put his question without reading the dispatch?


Gordon Francis Higgins: Yes. In the statement to which I was about to refer the suggestion appears that the advisory council is going to use the national census for some of its purposes. Is that correct?


Paul-Émile Côté: I shall take the question as notice.



CIVIL DEFENCE


[Stage Direction]
On the orders of the day:
Howard Charles Green: I should like to direct a question to the Minister of National Health and Welfare. Have reports been received from Vancouver urging that the two fire protection barges which were in use during the last war should not be disposed of to persons in the United States but should be retained in the harbour to assist in the civil defence program?


Paul Joseph James Martin: The hon. member gave me notice of his question just before I came into the house. I hope he will permit me to say that last week the hon. member for New Westminster made representations with respect to these barges, particularly in so far as they affect New Westminster. The situation is that the barges are the property of Crown Assets Corporation, and no decision has yet been made as to their disposition. However, the civil defence organization of greater Vancouver has made arrangements to hold them pending the decision that may be made by either the provincial or the federal government.


Howard Charles Green: I think the objection was to having them sent to the United States.


Paul Joseph James Martin: Yes. I have dealt with that by saying that pending a decision the barges are being held in this country.



CANADIAN AND BRITISH INSURANCE COMPANIES ACT


Douglas Charles Abbott: that the house go into committee to consider Bill No. 285, to amend the Canadian and British Insurance Companies Act, 1932.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


Louis-René Beaudoin: Perhaps I should say that the bill has already been carefully considered by the standing committee on banking and commerce.
Sections 1 to 3 inclusive agreed to.
Bill reported.


Mr. Speaker:: When shall this bill be read a third time?


Douglas Charles Abbott: If I have unanimous consent, I should like to get it to the other place.


Stanley Howard Knowles: You do not need unanimous consent; second reading was given on a previous day.
Bill read the third time and passed.



TRADE AGREEMENTS


Louis Stephen St-Laurent: That the subject matter of the Torquay negotiations, namely, the final act of Torquay; the decisions agreeing to accession; the Torquay protocol to the general agreement on tariffs and trade; the modifications of the schedules to the general agreement on tariffs and trade resulting from the Torquay negotiations; and the declaration on the continued application of .these schedules, be referred to the standing committee on banking and commerce.


George Alexander Drew: Mr. Speaker, I propose to have something to say on this, but before making any observations on the subject matter of this motion I wondered if it was the intention of the Prime Minister to make any statement.


Louis Stephen St-Laurent: Two statements were made to the house, one by the Minister of Trade and Commerce (Mr. Howe) and the other by the Minister of Finance (Mr. Abbott), on May 8, when the announcement was made. In drafting this resolution we have endeavoured to make it all-inclusive, so that everything that would have any bearing on the subject would be before the committee. That body, being a standing committee has, by virtue of its appointment and the resolution passed immediately after it

was appointed, the right to send for persons and papers and from time to time to report its observations to the house. I understand the Minister of Finance has certain explanations to make to the house as to the manner in which the proceedings took place and as to the material which this resolution covers and which would go to the committee for investigation and such report as it may see fit to make. If it were the pleasure of the house to hear the Minister of Finance at this time I think he might be the one to open the discussion.


George Alexander Drew: I was only asking the question for the purpose of determining the order of debate. I would prefer to wait until I hear any explanation that may be given.


Douglas Charles Abbott: I had assumed that would be what hon. members would wish; and the statement I have to make is purely supplementary to the statements made by the Minister of Trade and Commerce and myself a week or two ago.
Hon. members will recall that when the results of the Torquay tariff conference were announced in the house some two weeks ago, my colleague the Minister of Trade and Commerce made a comprehensive statement outlining the benefits which Canada will receive under the new trade agreements. At that time I also spoke on the changes in the Canadian customs tariff which we had agreed to make as part of the Torquay agreements. In addition my colleague the Secretary of State for External Affairs (Mr. Pearson) issued a fairly lengthy press release outlining in somewhat greater detail the results of the conference. It is therefore unnecessary to cover that ground again today, but I would like to supplement the previous statements with a few explanatory remarks.
When the Prime Minister presented the resolution referring the Torquay agreements to the standing committee on banking and commerce, he referred to a number of documents which embody the results of the Torquay negotiations. These documents are somewhat technical and complicated. A brief explanation of what they contain may be helpful to the house in its consideration of the resolution.
First, a word about the final act of Torquay. This is a purely formal document, authenticating texts of the legal instruments which were drawn up to give effect to the agreements reached at Torquay. It simply states that representatives of the signatory countries had assembled at Torquay for the purpose of carrying out tariff negotiations; that they had achieved
Trade Agreements
certain results; and that the results described in the accompanying instruments do in fact describe accurately what had been done. The final act was signed at the close of the conference by all the participating governments. All the other legal instruments which the Prime Minister mentioned in the resolution are annexed to the Torquay final act.
Annex I to the final act contains the decisions agreeing to the accession of six new countries to the general agreement on tariffs and trade. From the very inception of the general agreement in 1947 provision was made to allow additional countries to join the agreement and so enjoy its benefits, provided, of course, that they enter into negotiations with a view to granting tariff concessions equivalent in value to the concessions made by the original members. The question of admitting new countries is of vital concern to all members because, as hon. members know, under the most-favourednation clause once a country is accepted into the agreement it is automatically entitled to all the tariff concessions granted in the course of the three sets of tariff negotiations held under the general agreement since 1947. Hon. members will recall that these three sets of negotiations occurred as follows: 23 countries at Geneva in 1947, 33 countries at Annecy in 1949, and 34 countries at Torquay in 1951. In order to ensure that the new countries do in fact make adequate payment for membership, the agreement provides that a two-thirds majority of the present membership is needed before a decision can be taken to admit a new country. In this way, by giving members an opportunity to pass judgment on the value of the tariff concessions offered by the countries seeking admission to the group, the principle of reciprocity and mutual advantage is protected.
One of the main purposes of the Torquay conference was to increase the over-all value of the general agreement by expanding it to include Austria, the German federal republic, Korea, Peru, the Philippines and Turkey. As hon. members know, Canada concluded successful agreements with all those countries. Accordingly, together with the United Kingdom, United States, and other important countries, we are prepared to indicate readiness to accept them into the general agreement by signing the decisions agreeing to their accession. The last day for signing these decisions is June 20. It is expected that the necessary two-thirds majority will be forthcoming on behalf of all the new countries, so that they will all become members shortly after that

Trade Agreements
date. Canada will extend the benefits of its tariff concessions to the new countries after they have been formally accepted, as members and have extended their tariff concessions to Canada.
Annex II to the final act contains the Torquay protocol to the general agreement on tariffs and trade. The Torquay protocol is the principal instrument which emerged from the conference and, I believe, the document in which hon. members will be mainly interested. It is designed to achieve three things. First, it contains the detailed terms and procedures under which the new countries will be admitted to the agreement. Second, it amends the general agreement in order to extend the Geneva and Annecy tariff concessions for a further period of three years. Third, it embodies the results of all the tariff negotiations undertaken at Torquay. These results are contained in a series of tariff schedules annexed to the protocol, one for each of the present members, and one for each of the acceding countries.
I do not intend to review in detail the legal terms of accession which make up the bulk of the protocol, because they are quite technical and not of general interest. Briefly, the terms of accession provide for reciprocal rights and obligations, so that new countries will be essentially in the same position as the present members. I would, however, like to say a wordi about the arrangement to extend the Geneva and Annecy concessions for a further period of three years, because this is one of the important achievements of the Torquay conference. As hon. members know, one of the main purposes of the general agreement is to reduce tariffs and other trade barriers to reasonable levels, and in this way to stabilize the conditions of world commerce by agreement among the principal trading nations not to raise their customs duties beyond certain agreed maximum rates. Prior to the general agreement there were, of course, many bilateral agreements in which countries undertook not to raise tariffs on specified items for certain fixed periods of time. While these agreements did provide an element of stability in tariff levels between nations, they did not go far enough, because there were large areas of trade not covered by such agreements. The general agreement drawn up in 1947 was an attempt to overcome this element of instability in world tariff levels. This agreement, which includes all the principal trading nations, together accounting for over 80 per cent of world trade, was a most significant achievement in the field of international co-operation since the end of the war.
The reductions and bindings in the rates of customs duties which were negotiated at

Geneva in 1947 and at Annecy in 1949 had an assured life only to January 1, 1951. Beyond that date the tariff concessions would remain in force, subject, however, to the right of members to make modifications or withdrawals after giving appropriate notice. It was felt that if the Geneva and Annecy concessions became liable to widespread modification or withdrawal, the stability of world tariff levels, one of the main benefits afforded by the agreement, would be imperilled. It was also quite clear that before further progress could be made by way of a new scaling down of high tariff barriers, or before additional countries would agree to accept membership, a decision would have to be taken with respect to the status of the original tariff concessions. Accordingly Canada, together with the United Kingdom and the United States, proposed that the previous agreements be extended for a further firm period of three years. This proposal was accepted by all the participating countries, and with minor modifications the original concessions were extended until January 1, 1954. Agreement on this basic issue paved the way for a large number of new tariff concessions among existing members, as well as with the six new countries. The formal amendment, extending the agreements for a further three years, will come into effect when the Torquay protocol has been signed by two-thirds of the present members. In the meantime, however, in order to secure the position until the formal amendment comes into force, the participating countries signed a declaration undertaking not to exercise their right to modify or withdraw tariff concessions prior to January 1, 1954. This declaration is contained in annex III to the final act.
Finally, I should like to say a word about the tariff schedules which are annexed to the Torquay protocol. These schedules, one for each of the participating governments, contain all the tariff items on which countries undertook not to raise their customs duties beyond the maximum rates stated therein for a period of three years. In most cases the rates shown in these schedules are reductions from existing rates, while in other cases they represent bindings of present customs duties against increase. There are thirty-seven such schedules, and the one allocated to Canada is schedule V which, as members of the house will recall, I tabled on May 8. The Torquay tariff schedules supplement and, in some instances, modify similar schedules which emerged from the previous conferences held at Geneva and Annecy. In order to get a comprehensive picture of the whole range of tariff items now covered by the general agreement, one would have to look at the separate

tariff schedules which were drawn up at Geneva, at Annecy, and finally at Torquay. I understand that the secretariat is now in process of preparing consolidated tariff schedules showing, under one cover for each of the countries, all the tariff concessions granted under the general agreement on tariffs and trade since 1947.
The legal documentation embodying the results of the Torquay negotiations is, as you might expect, voluminous, so that we have only published the Canadian schedule V. I believe copies of schedule V have been distributed to all members of the house. The schedules of tariff concessions by all the countries, and the text of the Torquay protocol, have been published by the secretariat at Geneva and released in limited numbers on May 12. We are endeavouring to obtain sufficient copies, and these will be distributed to all members of the standing committee on banking and commerce as soon as they are available.
I hope, Mr. Speaker, that after this resolution has been discussed and passed by the house, the question of this agreement can be fully considered by the banking and commerce committee where, as I indicated the other day, Mr. Hector McKinnon, chairman of the tariff board, who was one of our principal negotiators at Torquay, as well as other members, will be available to answer any questions hon. members may have in connection with the Torquay agreement, or the proceedings at Annecy and Geneva.


George Alexander Drew: Mr. Speaker, I expect that there will be general approval of the decision of the government to refer the Torquay agreement to the banking and commerce committee as proposed in this resolution. My remarks are directed, first of all, to the general effect of the Torquay arrangements, and second as to the essential considerations which it seems to me should be before that committee in addition to the consideration of the Torquay agreement itself. While this resolution deals exclusively with the results of the Torquay agreements, and the documents related to those agreements, the banking and commerce committee will of course have full authority to make such other recommendations as may appear to be appropriate in the light of the Torquay arrangements.
It is with that thought in mind I wish to make some observations concerning the Torquay agreement, and also on the general subject of trade. We cannot regard the Torquay decisions in a vacuum, but must regard them as part of an integrated picture of our world trade as a whole. I am speaking in that respect of Canada, and of the impact
Trade Agreements
of those arrangements upon Canada at this time. First of all, I believe it is desirable that the Torquay agreement be kept in perspective, because, if there is a tendency to overemphasize the results of what took place there, there may be the same tendency to overlook other matters that are of equally great or perhaps greater importance, having regard to our long-range picture of world trade.
Undoubtedly the presentation of the results of that conference by the Minister of Trade and Commerce (Mr. Howe), and the supplementary statement made public by the Secretary of State for External Affairs (Mr. Pearson), did leave the impression that tremendous gains had been made at Torquay. I believe it will be necessary for all of us to wait and see exactly what happens before we assess in very precise terms exactly what the effeot of the Torquay agreement is going to be upon Canada or upon the other countries. But one of the things which it seems to me might well be in the minds of the members of the banking and commerce committee in considering these agreements, and any other recommendations that they think it desirable to make, is that the headlines in the press are not, in themselves, going to bring results. It would be unfortunate if, through the great headlines that were given to the Torquay agreement, we got the idea that these agreements alone were going to produce immense gains for Canada.
I believe all hon. members of this house will welcome whatever extension of trade has resulted, or will result in the future, from these agreements. But there are definite limitations upon the results that can flow from those agreements, which it would be a good thing to keep in mind when we are considering the whole problem of world trade. The Minister of Trade and Commerce has stated that at the moment we have no worries about marketing our products. Undoubtedly that statement interprets the unusual situation in which we find ourselves at the moment, with certain reservations. The fact is that already there does seem to be some concern as to whether there may not be too great exports of some particular products.
The first thing that all of us are naturally concerned about is the longer picture of the future, and what is going to happen in the years ahead. Unfortunately it would appear that, in so far as greatly broadening world trade is concerned, Torquay has not lived up to the expectations of those who went there from the different nations that attended that important conference. For one thing, there was the effective burial of the international

Trade Agreements
trade organization, to which so many people had attached such great hopes. It may well be that some other organization will emerge which will give alternative advantages. When we consider, however, the great expectations that were attached to the international trade organization, the demise of ITO cannot in itself be regarded with any considerable measure of satisfaction until we know what is going to take its place.
The London Economist, which is regarded as a modest and extremely well-informed publication in dealing with matters of this kind, put it in these words:
ITO itself disappeared, with all the hopes built upon it, into the limbo of stillborn international organizations.
This is a time when all of us are hoping to strengthen international organization and to extend in every way possible a wider and wider association in international trade and in other fields of international co-operation. For that reason it seems to me that the demise of ITO is a regrettable feature of the discussions at Torquay.
Generally, the financial observers of this country have been inclined to modify greatly the first glowing reports which were given of these agreements when they were announced. As an example, a recent discussion of this subject in the Montreal Financial Times of May 11 is headed "Torquay Tariff Agreements Show Meagre Results." In the Financial Post published in Toronto, giving its general impressions of Torquay, we find the heading: "Little Gained from Torquay". These headings merely indicate the moderation with which we should accept the glowing statements that were made about the agreements and about their advantage to Canada. In the Winnipeg Free Press, for instance-which is generally favourable to the point of view expressed by the government in matters of this kind-their discussion of Torquay is headed "Trade Liberalization Postponed." Another heading, this time in the Windsor Daily Star of April 21, describes tha general effect of the article under the heading as follows: "Wilgress Says Results Not So Great". Then in the body of a Reuters news agency dispatch from Torquay the conference chairman, L. Dana Wilgress of Canada, is said to have gloomily reported: "The results are not as great as many had hoped."
Mr. Speaker, these statements indicate reasons why this house should consider other aspects of world trade. Before this house discusses this subject again, the banking and commerce committee should be considering other aspects of world trade so that we shall not alone be dealing with the results of the Torquay conference at the time that

this matter comes back before us for further consideration. If we become victims of the illusions created by the headlines which accompanied the formal announcement in this house of the Torquay agreements, then we may be diverted from the attention that should be given to other problems of trade which are of as great importance as and, in some cases, perhaps of greater importance than, the Torquay negotiations and the agreements which resulted from them.
I think that the committee on banking and commerce, in recognizing that the Torquay agreements relate to only a segment of the whole problem of world trade for Canada, might well take into consideration the recommendation made by a meeting of representatives of industry and commerce in Great Britain and Canada when they met in Toronto on May 18. At that meeting, which took place only three days ago, leading manufacturers and businessmen from Britain and from Canada discussed various problems of world trade and the possibility of extending it. The recommendation to which that meeting attached the greatest importance, and the one which received the most attention in the public discussion at that conference in Toronto, was that steps should be taken immediately-and may I emphasize that word "immediately"-to convene a conference of the governments of the nations of the commonwealth and of the other countries of the empire, for the purpose of extending trade within the commonwealth and empire, and of finding a solution of those problems and difficulties which today are raising barriers against that trade.
This conference which was simply an informal meeting of high-ranking representatives of business and commerce in both Canada and Great Britain was attended by men of outstanding experience; and I would mention the fact that, in addition to the general recommendation that the possibility of expanding trade and commerce within the commonwealth and empire be explored, they also urged the consideration of the possibility of finding some solution for the problem of making the pound and the dollar convertible.
I would recall to your mind, Mr. Speaker, the fact that on February 28 of last year we placed before this house a resolution urging the convening of such a conference. At that time the government did not see fit to accede to the arguments we presented in support of such a conference. In fact the suggestion was made that such a conference could not be productive of useful results at that time.
Now we have a recommendation of the very highest ranking businessmen from

Canada and Great Britain, urging that there be a commonwealth economic conference at the earliest practical date. This, it seems to me, ties right in with the discussion of the Torquay agreements, because the value of the Torquay agreements, or otherwise, will depend very largely upon their relationship to trade within the commonwealth itself. Having said that, I would impress upon this house and, through the statements in this house, to members of the banking and commerce committee, that there is good reason for the sense of urgency behind that recommendation of the meeting in Toronto last week of the Anglo-Canadian trade committee.
I think this would be an appropriate time to recall what has happened to our export business to the United Kingdom. At the very time that our exports to the United States have been mounting so rapidly, our exports to the United Kingdom have been diminishing to a very dangerous extent. These are the figures from 1943 on, in millions of dollars, in exports to the United States: 1943, $1,149 million; 1944, $1,301 million; 1945, $1,197 million; 1946, $888 million; 1947, $1,034 million; 1948, $1,501 million; 1949, $1,503 million; 1950, $2,021 million. Placed side by side with the export figures to the United Kingdom, we see what has been happening in the percentage of exports going to our two greatest export markets. In 1943 our exports in dollars to the United Kingdom amounted to $1,033 million; 1944, $1,235 million; 1945, $963 million; 1946, $597 million; 1947, $751 million; 1948, $687 million; 1949, $705 million; 1950; $470 million. Thus, whereas in 1943 our exports to the United Kingdom and to the United' States were in reasonable balance, amounting as they did1 to $1,149 million to the United States and $1,033 million to the United Kingdom, we find that last year the export? to the United States were $2,021 million and to the United Kingdom only $470 million. That represents in dollar value a drop to 37 per cent of what our exports were to the United Kingdom in 1943; but that itself does not give the whole picture, because, if we take the basic dollar value used by the dominion bureau of statistics in its regular cost of living index, we find that our dollar in 1943 had a value of 84 cents; whereas last year, or early this year, it had a value of approximately 55 cents. Thus we find that the actual value of exports to the United Kingdom in terms of equalized dollars amounts to only something just less than 30 per cent of what it was in 1943.
One of the answers, and one of the very important answers, to this difficult situation
Trade Agreements
is the inconvertibility of the dollar, which has raised difficulties within the period I have mentioned. These businessmen; these financial, hardheaded, experienced men, who have been dealing in international trade and in international finance for many years, came to the conclusion at this gathering of the Anglo-Canadian trade committee that steps should be taken immediately to convene a conference of governments of the commonwealth at the earliest practical date to tackle this whole problem interpreted in those dollar figures that I have given, and to seek ways of breaking the log-jam that is threatening our traditional trade channels in the years ahead.
We have every reason to welcome the extension and expansion of trade with the United States. On many occasions in this house, long before any recent comments about the fact that Canada must not be a satellite of the United States, members of the party to which I belong have urged that we should make sure that we did not become a satellite of the United' States by making sure that we preserved an appropriate balance in our world trade so that no matter how friendly our relationships with the United States might be we would not have all our eggs in one basket, and not find ourselves economically dependent upon the United States although we do regard them with such friendship. It was with that very thought in mind that on more than one occasion during the past years this party has presented motions calling for an economic conference of the nations of the commonwealth to find ways to remove those barriers, to break this log-jam of dollar-pound inconvertibility, and generally to lay the trade basis for first of all the recovery of our commonwealth markets, and then the expansion of those markets in the years ahead.
By all means, let us seek the expansion of our trade with the United States; but let us remember that this country is set up for trading with the United Kingdom and the commonwealth. That was not done with any thought of placing barriers between the United States and Canada. Our ties of blood, our ties of friendship and our ties of history are too close for the effective erection of barriers between the peoples of the United States and Canada, who know each other better than the peoples of any other two nations in the whole world.
But that does not get away from the fact that this country has recognized from the earliest days that our production is largely parallel with and not complementary to that of the United States. One of the reasons we have been able to export such enormous

Trade Agreements
quantities to the United States has been one which none of us can welcome. Undoubtedly one of the reasons why there was such a tremendous increase last year in the dollar value of exports was the tremendous stockpiling that is taking place in the United States. Much of that business was abnormal; much of that business was business which took from Canada raw materials which, to the great advantage of our own people, we could be fabricating in Canada.
I suggest we should examine with great care many of the lines of raw materials and products we exported last year to the United States, and we should consider whether it is desirable that exports on that level, of those particular raw materials and commodities, should continue in future years. I do not wish to have that statement interpreted at any time as a suggestion that I do not welcome Canada's full participation in any joint steps which are necessary for the building up of the mutual strength of each of these nations. I suggest however that we should recognize why it was that the figure rose so rapidly from $1,503 million in 1949 which, up to that time was a record in dollar value of exports, to $2,021 million last year. The preparation for the defence of freedom was part of the reason for that great increase.
Along with that we see the alarming drop from the figure of $705 million in dollar value of exports to the United Kingdom in 1949-and this amount was less than half of the value of exports to the United States in that year-to the tragically and dangerously low figure of $470 million in 1950-and that figure is even lower than it appears, if we consider the depreciated value of the dollar. It will be noted that this last-mentioned figure is not much more than one-fifth of our value of exports to the United States.
There are many reasons why, by every device within our power, we should be seeking to find a solution for the problem of convertibility of the dollar and the pound as between Canada and the United Kingdom. That is our first problem. I think we should not be unwilling to explore the problem with the government of the United Kingdom and other governments throughout the commonwealth, without waiting for any general solution of the problem by the international organization built up under the United Nations.
After all, if for military purposes it is found satisfactory for a limited number of nations within the United Nations to deal with a particular military problem, as we have in respect of Korea, and as we did earlier in respect of the Atlantic nations, then I say that in the field of international trade there

is no reason whatever why nations of the commonwealth should not seek a solution of this problem, to their own advantage and to the advantage of every trading nation in the world.
If we can find a solution to this problem as between Canada and other nations in the commonwealth, we shall have found the key which will unlock the door to vast trading possibilities throughout the whole world, which are being held back by this one almost insuperable problem. Today we are nearer this possibility than we have been at any time since the dollar and the pound were declared inconvertible. The very fact that it was necessary for the United States to buy essential requirements last year in such large quantities throughout the whole world has eased the dollar problem to an extent it has not been eased since this major difficulty first arose in the post-war period. For that reason I do believe that, when dollars are flowing to nations for essential defence supplies, we should seize this opportunity to seek a solution of the problem.
In a speech delivered in London over a year ago the Minister of Agriculture (Mr. Gardiner) stated why he thought trading possibilities between our two countries should not be limited by any artificial barriers of this kind. His statement was welcomed then by the United Kingdom, and I believe found general approval at that time. He was pointing out that, at a time when there are hungry nations in the world, it seems illogical that we should sit back and do nothing to break down the barriers which are preventing our selling food supplies we can produce in such quantities and which the people of other nations need so badly.
We can produce a great deal more. We can produce a great deal more of many types of essential products. It has been said over and over again that ohe of the devices by which we can most effectively fight communism is to see that there is ample food throughout the world. Today India, a sister nation in the commonwealth, is in many sections facing real and terrible starvation. Without delay, not only as a practical gesture of health and friendship, but also as evidence of our partnership within the commonwealth, Canada should make available to India all the wheat we can possibly spare to ship at this critical time.
Quite apart from that, we should be finding ways in which nations within the commonwealth which need our food supplies can buy that food, and buy it very largely through the rotating exchange which would be possible if we were able to break down this

barrier of inconvertibility. There are humanitarian reasons; there are business reasons. There are reasons related to the strength of the British partnership itself which all suggest that when the Torquay agreements are before the committee on banking and commerce that committee should also consider this recommendation, which has been made in such urgent terms by the Anglo-Canadian trade committee.
I hope that when the banking and commerce committee reports to the house it will report not only on the Torquay agreements but also on other aspects of related trade, and that it will recommend that without any delay whatever the Canadian government, which is in a unique position to take such action, being the one nation of the commonwealth which deals in dollars rather than in pounds, should take the necessary steps to bring together a conference of the nations of the commonwealth to seek every possible means of extending trade and removing any barriers which still hinder the extension of trade and of contact of every kind within this great fellowship.


Major James William Coldwell: Mr. Speaker, I think that all of us who followed the Torquay conferences hoped that the name of Torquay might be associated with a much wider reduction of tariffs than was there achieved. I quite agree with what has already been said that, as far as one is able to see from the schedules that have been published in some of the newspapers, there is very little indeed that gives any hope of a really wide extension of trade and commerce. In his last few words I think the leader of the opposition (Mr. Drew) indicated that he had overlooked the content of the resolution. The wording of the resolution is as follows:
That the subject matter of the Torquay negotiations, namely, the final act of Torquay; the decisions agreeing to accession; the Torquay protocol to the general agreement on tariffs and trade; the modifications of the schedules to the general agreement on tariffs and trade resulting from the Torquay negotiations . . .
And so on. The committee is not ordered to report back to the house. In December, 1947, there was a resolution on the order paper dealing with the Geneva agreements. It died on the order paper although we had been brought here specifically to discuss the Geneva agreements. The present resolution merely refers the subject matter of what took place at Torquay, and the results that were obtained, to the banking and commerce committee. They are not asked to report or to recommend anything.
Indeed the government has the right to make certain reductions or modifications in
Trade Agreements
our tariff schedules by order in council. In other words, we are not requested as a parliament to confirm anything that the government might do with respect to reduction of tariffs under agreements of this description. Neither at Geneva, at Annecy nor at Torquay were changes made in our tariff schedules that required the approval of parliament. I imagine that the resolution is in this form because of the authority that the government now has. What we are really doing under the resolution is merely referring the subject matter to the banking and commerce committee in order that that committee may call before it the officials responsible for these negotiations and for arriving at the conclusions reached at Torquay.
In passing may I say that I think the committee of representatives we had at Torquay, headed by Mr. Hector McKinnon, was an exceedingly able one, and I am sure they did their level best to safeguard the interests of Canada. However, as far as we are concerned this afternoon, let me repeat that all we are doing is referring the subject matter of these agreements and conclusions reached to the banking and commerce committee for their study. All they need do at the end of their study is to do what was done with the Geneva agreements, transmit the evidence and report to the house that the committee has studied and considered the matter referred to them. No recommendations will be required of the committee. Indeed under a resolution of this kind no recommendations could be made to the house that would be at all helpful to us or enable us to modify these agreements in any way.
Like the leader of the opposition-and I am sure in this respect all parties in the house agree-we regret that the international trade organization has failed to do what we hoped it would under the United Nations. I do not think there are any members who do not realize that the freeing of the channels of international trade is one of the great problems confronting the world. Indeed the need to free those channels and, as the leader of the opposition indicated, at the same time have a universal currency in which all our values could be expressed and to which our trade relationships could be related, makes it clear that convertibility of the dollar and the pound is of great interest not only to the world but particularly to the country in which we live.
Our whole economy was built up in the past on what has sometimes been referred to as the Atlantic triangle. We sold vast quantities of goods to Great Britain and the sterling area generally, and with the credits we obtained from our trade with that area

Trade Agreements
we were able to purchase vast quantities of goods from the United States. I am one of those who believe that at the present time our trading relationships are not healthy. While it has been valuable to increase our exports to the United States in the spectacular manner that we have, I believe that in reality that is not a sign of health so far as our economy is concerned. At the same time, as has already been pointed out, we have seen our exports to the United Kingdom drop proportionately. When we consider what our exports are from Canada to the United, States we realize that they are largely made necessary because of the international situation and also because of the depletion of United States resources. The wasteful manner in which the forests and the great iron ore deposits have been exploited has compelled the United States to look across the border, with considerable interest and some envy, at the great resources of this country. Our exports to the United States perhaps are not the sign of a healthy economy we would like to think they are. We may find,-perhaps not within the next few years, because the international situation may prevent it-that if and when the United States again builds up surpluses of goods, as she did in the past, she will no longer want many of the products and commodities we are now exporting to her, because she will no longer need them. Those of us who have lived in western Canada for any number of years have seen occasions when the United States was willing to take all the cattle and other commodities we could send her; but the time came when the United States was not able or willing to absorb the exports we had been sending, and we found ourselves cut off from the market we had built up. Of course to some extent that also applies to other markets, but in many instances and many respects I think the United States has been our most uncertain market.
As has been said already this afternoon, in many respects our economy, and particularly our agricultural economy, is not complementary to that of the United States, as it is to that of Great Britain and the sterling area. It is distinctly competitive. When surpluses occur in the United States, under the peculiar congressional system in that country powerful blocs can exert sufficient pressure upon members of congress and congress itself so that we may find ourselves in a very embarrassing position. I quite agree that we should do everything we can to encourage the maintenance and expansion of our trade with the United Kingdom and the sterling area, but I do not think we should go back to 1932 and in the building up of our
[Mr. Coldwell.l
trade with the commonwealth do anything that would be restrictive. If we entered into trading negotiations and arrived at trade agreements that were restrictive, in the sense that we were building trade within the commonwealth-if that were possible today, which I do not believe it is-we would be interfering with that larger expansion of trade at which I think we must all aim.
This agreement, like the others, is largely a matter of reciprocity in the hope that the nations agreeing at Torquay may obtain mutual advantages; and after all it is on mutual advantage that trading relationships are built. I hope we shall obtain more from this agreement than appears likely at the moment. Like most hon. members, I am sure, I have been able only to look over these schedules and get some general impressions of them. I do not note that the concessions we are making to other countries, particularly in regard to commodities we get from the United States, are offset to the extent some of us had hoped by the concessions we are getting from the United States and other countries. However, that is a first impression, which may be dissipated when the banking and commerce committee is able to question the representatives who negotiated this agreement on behalf of Canada. As things stand in the world today I think one of the satisfactory features of the negotiations is that the Geneva and Annecy agreements have been extended until January 1, 1954. At least that gives some guarantee of stabilization during that period and removes some uncertainty in our trading relationships. The reductions that are made are to come into effect, so the minister told us a few minutes ago, on June 20; but only, I believe, if they come into effect on that date mutually. We are not obligated to put anything into effect until the country with which we have negotiated is prepared to put into effect the mutual concession. I think the object of the extension of the agreements for three years, to prevent increases in these tariffs during that time, is something we should all welcome in this house; but really what I rose to say was that while we support this resolution referring to the committee the subject matter of these negotiations and agreements, we think it would have been well if we could have had a report and some recommendations from that committee so that we could have discussed the wider issues involved under these Torquay arrangements.
I do not intend to say more. I believe one of my colleagues is going to deal with several specific matters connected with these agreements. I do hope, however, that the agreements whir l have been made-Geneva,

Annecy, Torquay-will never be regarded either by the government or by anyone else as a substitute for what we hoped might be done under the international trade organization of the United Nations. It seems to me that if we are going to build up the kind of world we hope to see we must have a freer flow of commodities all across the world, and that free flow must be in the nature of a two-way traffic. We cannot expect to sell in markets where we do not buy. Then, as was said a few moments ago, we must also consider the effect on the improvement in standards of living, so that Canada may play her part in meeting the threat to the world caused by the poverty, misery, want and economic insecurity to be found over such a large portion of the globe at the present time.


Solon Earl Low: It is a matter of regret to us, Mr. Speaker, that' this resolution in the name of the Prime Minister does not provide for a report and recommendations to be made to this house after the committee has studied the Torquay agreements and decisions. I feel, as the hon. member for Rosetown-Biggar (Mr. Coldwell) has just expressed himself, that much good may be lost in this discussion since no provision has been made for a report and recommendations by the committee.
We are keenly interested, Mr. Speaker, in any proposals for the expansion of world trade on a basis mutually satisfactory to all countries concerned. Possibly we may find in the subject matter of the Torquay negotiations, that is the final act of Torquay and the decisions agreeing to the annexations and so on named in this resolution, some evidence that the barriers to satisfactory trading relations between nations have been removed to a certain extent. I hope so. I am not fully enough acquainted with what happened at Torquay to be able to assess that, but I look forward to the study in the banking and commerce committee, and perhaps we shall have something to say at the conclusion of the studies there. I am hoping that the real debate will take place when the committee reports to the house, because then we shall have much more information on which to base a sound judgment.
We do welcome, however, any agreements that lead to the removal of barriers, and to a mutually satisfactory type of trading relations. Over the years in this house I believe we have made our position quite clear, that is that we were working towards a type of trading relationship which would result in a balance, not necessarily a balance between two countries, but a balance between any one country and the rest of the world. We are still convinced, Mr. Speaker, that this
Trade Agreements
ideal, towards which we are labouring constantly, can only be reached if the great trading nations of the world will determine now, or at any rate soon, to buy from the rest of the world as much as they wish to sell to the rest of the world. Only by so doing can the currency with which to trade be made available.
We have been trying to follow an almost impossible method of trade. This matter of the convertibility of currencies, which has been one of the principles laid down upon which satisfactory trading relations can be carried on, is a fool's dream under present circumstances. There can only be convertibility of currencies if the great trading nations like United States, Canada, and Great Britain are prepared to purchase from the rest of the world goods to an amount equal to those which they are prepared to sell to the world. Now, I am afraid that Torquay has not made too many strides towards that ideal. It does not appear that is so, although we shall reserve a decision on that matter until such time as we have had a chance to examine more carefully what did come out of Torquay.
We welcome, Mr. Speaker, whatever reduced tariffs have been effected, particularly any movement towards a reduction to a reasonable level of tariff barriers. Now, that does not mean to say that we favour absolutely free trade, because we try to be realistic about it. Under present circumstances, no country could possibly remove all its tariffs. No country could go on a completely free trade basis. We must reserve the right to preserve our economic defences, and tariffs certainly constitute one of the bases of economic defence. I am afraid that we went a bit far in that regard under the Bretton Woods agreement. I am afraid we did agree there to surrender too many of our defences; tariff reductions or increases were amongst those that we did surrender. We have been breaking that agreement right and left ever since it was made. We have been ignoring it in many respects, indicating how foolish it was to enter into it in the first place.
In any event, we welcome whatever Torquay did to reduce tariffs to a reasonable level, so that there will be as few barriers to trade as possible. We are going to carefully study exactly what they were. We like the idea, which we have been constantly advocating, of a commonwealth economic conference. We feel that the commonwealth should and could be a great balancing factor in a world of trade unbalance. I do not know of any better way to try to restore balance, in a world of unbalance of trade, than to promote

Trade Agreements
the solidarity of the commonwealth and agreement amongst ourselves-not restrictive agreement, but at any rate a solidarity that would be in many respects comparable to our good neighbour to the south of us in its industrial capacity first, and in its trading possibilities second. It would only be through having such a solid commonwealth bloc that we could possibly impress upon nations like the United States the importance of attempting to balance trade. I do not see any other way. Certainly, there is much merit in what the leader of the opposition (Mr. Drew) has suggested in that regard.
We are interested not only in those things, Mr. Speaker; we are also especially interested in what progress might have been made at Torquay in connection with the principle of discrimination. One could speak at great length about that matter, but inasmuch as we are in the dark concerning what was accomplished at Torquay with respect to discrimination, we have to reserve anything we might want to say about it until after we have had our study in the committee. But let me say this. If the world is still crippled through having to accept the unconditional mostfavoured-nation clause in all trading agreements, then I am afraid Torquay has not accomplished very much. I am interested in finding out particularly just how far the foolish discriminations that are involved in the so-called unconditional most-favourednation clause have been removed. We have suffered, and other nations of the commonwealth have suffered, as a result of that foolish clause. We have fought wars over it, and I am afraid that unless the clause is modified, or unless it is thrown out altogether sometime and a much broader, more humanitarian principle imposed in its place, it will cause many more wars. I am going to reserve further discussion on that matter until I see just what the investigation in the committee brings out.
I am interested, and all of our group here are, Mr. Speaker, in what is going to be the future market for Canadian wheat and farm products. When I express that interest I have in mind what happened in 1949 and 1950, almost a godsend to the Canadian people, when the United States was prepared to spend over $960 million for Canadian farm products to send over to Europe under the ECA program. If it had not been for that, I just wonder where we would have found a market for that wheat and those farm products.


Mr. Macdonnell (Greenwood):: The government would have found it somewhere.
IMr. Low.]


Solon Earl Low: I imagine the optimistic suggestion of my friend the hon. member for Greenwood (Mr. Macdonnell) might have been made by the Minister of Trade and Commerce (Mr. Howe).


James MacKerras Macdonnell: That is
what they would perhaps have told us.


Solon Earl Low: That is right. That is what
they would have told us. But the situation is simply this. Had it not been for the generosity of the people of the United States in sipending that $960 million, we would have had a terrible situation in Canada. What I am anxious about, and what all the people here are anxious about, is this: what is going to be the situation in the future? Where are we going to sell those farm products and how are we going to be able to find a lucrative market for them in order that we can induce an all-out productive effort? That is an extremely important consideration for us. It is those things that we should like to study more carefully in the committee; and when we have all the information before us, Mr. Speaker, I hope we shall be able to have a real debate on -the occasion of the chairman's bringing in the report of the committee and moving its adoption.


James MacKerras Macdonnell: Mr. Speaker, I should like to make a few rather brief comments on the situation we have before us. First of all, I should like to associate myself with what has been said by the hon. member for Rosetown-Biggar (Mr. Coldwell) and by the hon. member for Peace River (Mr. Low), in suggesting that it would be highly desirable that we should be able to get much closer access than we seem likely to get now to the nature of the discussion and the inside views of those able men who represented us at Torquay. I think what has been said on that matter is extremely sound, and I should like to associate myself with it.	'
When we are considering this Torquay agreement, it is not possible to prevent our minds from going back some three years and a little more to the time of the presentation in this house of the Geneva agreement. I certainly wish there were time to read to this house the speech that was made then by the l-ate prime minister, in which he described to us the wonderful things that were going to happen, and in which we had a review of Liberal free-trade policy over the years, marred slightly by the fact that somebody reminded* him of the Dunning budget in 1930. Nevertheless, the former prime minister had a great field day.
Those who were in the house at that time will remember that we were led to believe

that we had1 been brought back here in December, or whenever it was, to a special session in order that we should press on with this great achievement and give effect to it as soon as possible. That was the beginning of it and here is the ending of it. That great speech was made on December 9, 1947. Then we come along, by toilsome stages, to June 26, 1948, when the leader of the opposition at that time asked the prime minister this question, as reported at page 5916 of Hansard of 1948:
Will the prime minister say whether he intends before prorogation-
Which was just on top of us at that time. -to deal with either of the two resolutions standing in his name?
Later Mr. Mackenzie King says:
I beg my hon. friend's pardon. My hon. friend is referring to resolutions with respect to the Geneva agreement?


Mr. Bracken:: Yes.


Mr. Mackenzie King:: I would say that they will
not be proceeded with this session.
That was the beginning and ending, so far as this house was concerned, of the Geneva agreement. And so far as my memory serves me, that is the last thing that happened. Certainly it has rested in peace, so far as this house is concerned, since June, 1948.


Clarence Decatur Howe: They have been in effect right along.


James MacKerras Macdonnell: Oh, yes.


Mr. Fleming:: Only in part.


James MacKerras Macdonnell: In part;
and with never any need of coming to this house. But of course we are used to that. That is just becoming routine.


Mr. Gardiner:: You could have brought it
here at any time.


James MacKerras Macdonnell: I pass over
Annecy lightly, and I come now to the new report from Torquay. Just in passing, I should like to stop for a moment to endorse what my leader has said about the importance of making all the progress towards convertibility we can. I do not share the views of the hon. member for Peace River (Mr. Low) that it is just a chimera that we should move towards convertibility. After all, after years or at any rate after a great many months of stubborn-shall we call it-pride or stubborn folly, or whatever you like, this government last summer-yes, it was last September-was forced to do the sensible thing; and I imagine that they know now that they should have done it long before then, but of course they will never say so.


Mr. Blackmore:: Will the hon. member
permit a question?
Trade Agreements


James MacKerras Macdonnell: I would
ask the hon. member to allow me to make my speech. I have only enough steam to carry on by myself. If I had to stop and answer questions, I might run down.


John Horne Blackmore: The trouble is you have
misquoted the member for Peace River.


James MacKerras Macdonnell: I will try
to answer when I am through. If the hon. member will allow me to make my speech, I will do the best I can to answer him privately afterwards. I never feel that I am equal to public discussion on that subject.
I should now like to draw attention to one or two estimates, from independent sources, of the actual effect of Torquay. I do not pretend to have studied every detail of the agreement, but I will read first of all a short extract from the Winnipeg Free Press, and then a short extract from the London Times, giving two opinions from those two quarters as to what the effect of Torquay was. First, I read from the Winnipeg Free Press of Saturday, May 12:
The new international trade agreements negotiated at Torquay and announced Wednesday probably mark the end, for the time being anyway, of the great postwar movement toward a freely-trading, multilateral world.
That is the sentiment of our own Winnipeg Free Press, and I suppose we can all earnestly hope that they are wrong. But at any rate that is their view. I continue reading from the Free Press:
Measured by the hopes which it had raised, the Torquay tariff conference was not a success.
I now turn to the London Times of May 11. I will not say they are more hopeful, but they are less pessimistic about the results of the agreement; and they have some interesting comments as to various ancillary features of the agreement which I think are of some interest and of some importance.


Clarence Decatur Howe: May I ask the hon. member a question before he reads from the London Times? Are they discussing the effect on Canada or the effect on England?


James MacKerras Macdonnell: The minister will have to make up his own mind. I think they are discussing mainly the effect on Canada.


Clarence Decatur Howe: Why would the London Times be concerned about Canada? It is not their custom.


James MacKerras Macdonnell: The minister may not know it, but they are still part of the British commonwealth. At any rate, they seem to be concerned.


Clarence Decatur Howe: That is a smart answer.

Trade Agreements


James MacKerras Macdonnell: I read from the London Times:
As a result of seven months of negotiations at Torquay (which are the subject of a white paper issued yesterday) the general agreement on tariffs and trade is to remain in force for another three years. This means that the reductions of import duties and the other measures to remove restrictive practices in international trade which were agreed upon at Geneva and Annecy are now renewed until 1954. This was no foregone conclusion. By the beginning of 1950 many European countries were restoring their protective duties to at least the prewar level. There was growing-and, in the end, successful-opposition in America to the Havana charter for an international trade organization. It is a matter for some congratulation that the effort to bring about freer world trade is to be continued after all.
So that they gleaned some comfort-perhaps not a great deal-out of the results. Then they go on to point out that there are some gains. I read again from the London Times:
The Torquay negotiations have achieved some new reductions in customs duties, and some new countries-above all, western Germany-have been brought into the general agreement.
Then they make a comment which I think is an extremely shrewd one. They say that probably one of the reasons that even a modicum of success was achieved was this, and I think this is a shrewd comment:
Probably the return of the sellers' market since the spring of last year is largely responsible; it has again dulled the edge of competition, and for the time being, fewer manufacturers feel the need for protection.
I suppose there is a certain amount of truth in that, and it raises in one's mind the question whether the period of active trade and of seller's market is not one which if at all possible should be availed of for the purpose of doing away with more restrictions.
Then they go on to speak about the imperial preference, and they have one or two things to say about that which I think are important. They had one very interesting comment, namely, the difference in attitude of the United States as between imperial preference and the Sohuman agreement. I was interested in that partly because I was at Strasbourg last summer when they were discussing the Schuman agreement. I will read again from the Times because I think they put it very well. They say:
Any failure in commercial negotiations with America is to be regretted. It had been hoped 1bat some valuable concessions which would have aided the increase of sterling sales in the chief dollar market might have been obtained. The Americans asked for concessions in return which the British government were not prepared to make, and they were above all anxious for a further reduction of imperial preferences. They wished to make arrangements with the members of the commonwealth one by one, for reducing the preferences which they give, without consulting the other member countries who benefit from them. This

approach was rejected. With some reservations, all the proposed reductions of imperial preferences have been discussed by all the commonwealth countries concerned and in the end very few concessions have been made. The chief changes have come out of negotiations between Canada and the United States; they are a token of the strong natural attraction of trade over the Canadian frontier-and possibly also of Canadian disappointment over the restricted market afforded for Canadian goods in this country.
I think the minister, even though he does not think that the Times should have any interest in this matter, may agree that their comments are not without a certain amount of common sense. I will read on, because again I think the points are so well made that they cannot be improved on:
The American attitude in these negotiations has reflected the difficulties of the American government over the renewal of the reciprocal trade act and the bill for the simplification of the tariff. Rather than accept the amendments by the house of representatives to the reciprocal trade act the president may use his veto.
Later on this comment touches on the difference in the relation between preference and tariff, and puts it in what I thought was a rather pointed way. It says:
In view of the present uncertainties this country must weigh with the utmost care the obligations which are imposed upon it by the general agreement. This is especially necessary now because the next meeting of the members in the autumn may be concerned with trying to give permanent form to the present temporary organization.
If a permanent organization is to be set up, this country cannot allow the status of preferences to be left, as it is at present, inferior to the status of tariffs. The illogicality of the American attitude to imperial preference is illustrated by the American support of the Schuman plan,-
Hon. members will recall that the Schuman plan is that much discussed plan proposed by Schuman of the French government in an attempt to integrate particularly French and German, and also other minor European countries', iron and steel industries. Last summer it looked as though it was likely to break down because of lack of sympathy from Britain; but by reason of recent changes which they have made, it now seems likely to succeed. I continue:
The illogicality of the American attitude to imperial preference is illustrated by the American support of the Schuman plan, which sets out to create a new free trade area in Europe and is at least as likely to hinder as to help the more general extension of freer trade. Certainly, Europe cannot be regarded as a more satisfactory economic unit than the commonwealth; the countries of the commonwealth, in fact, are naturally still more complementary than are the predominantly industrial countries of western Europe.
There is one further quote I wish to make because it is on the same point. It says this, speaking again of the American attitude towards the Schuman plan:
The cause of freer trade can only be hampered by illogical and one-sided distinctions of this sort;

and if the Schuman plan is a portent and the future lies not with many-sided free trade but with regional pacts, then the preservation of the bonds within the commonwealth will become even more vital for this country than it already is.
Now, Mr. Speaker, I have read these extracts because it seems to me that the points which they raise are very practical, and they are particularly underlined by reason of what the leader of the opposition said this afternoon regarding the meeting of Canadian businessmen and their desire to have a conference on commonwealth trade. The setting up of this free trade area in Europe, if that is what it comes to be, may actually hinder rather than help the task of freeing world trade.
Of course, there is another thing which comes into this, and which I should like to refer to briefly, namely, the everlasting question of bulk trade agreements. That of course is one of the things that bother them in Britain, and it is one of the things that bother us here. The Minister of Trade and Commerce, if you can still refer to him in that way, said very frankly when w'e were talking about the wheat agreement-I think it was the wheat agreement we were discussing in this house some weeks ago-"If we had known four or five years ago as much as we know now we might not have done quite the same thing." I should like to read a short extract from the Free Press again, which shows what they feel the international wheat agreement is doing to the growth of wheat in western Canada. It reads:
According to farmers' present seeding intentions it is down by-
That is the wheat acreage. I continue:
According to the farmers' present seeding intentions it is down by more than 700,000 acres or nearly three per cent.
Then later on they say:
But in the main the explanation is simply this: The other crops are offering the farmer the chance of making more money. Their price has improved, responding as it does to the influences that make themselves felt in a free market. As compared with this time two years ago, the price of oats is now 14 cents higher; barley is four cents higher; rye is 87 cents higher and flax is 82 cents higher. But wheat on the other hand is 14 cents lower.
I mention that because it has often been mentioned in the house before in the discussions within the last few days. There is one other point I should like to raise, which seems to become prominent. It was made prominent first of all, as I recall, by the Minister of National Defence (Mr. Claxton) in the speech he made on March 30 to the American arbitration association, if I remember rightly. At that time he referred with disappointment-indeed I think I 80709-2061
Trade Agreements
might say distress-to the very small amount of American munition orders, or orders in connection with the essential program, which are being received in this country. I think at that time he said $17 million only. I know that just the other day the Minister of Defence Production (Mr. Howe) said-I am not sure whether the figure he gave is strictly comparable-that we had got orders for something like $25 million worth of equipment. The minister shakes his head.


Clarence Decatur Howe: It is much larger than that.
You had better not use it. You cannot quote it.


James MacKerras Macdonnell: I had
better get what the minister said, and he can correct me if he wants to. In passing I notice one interesting thing. The minister pointed out the difference between manufacturing for defence at war, and when we are not at war. He said, speaking of peacetime demand and wartime demand:
At the present time, we have no such demand and we must think in terms of say vehicle production at the rate of about five a day, rather than the hundreds a day we produced last time.


Clarence Decatur Howe: Where did he say all this and when?


James MacKerras Macdonnell: This is very interesting. This is an address by the Right Hon. C. D. Howe-that is the minister, I take it-at Ottawa on May 14, 1951. Does the minister not think he said these interesting things?


Clarence Decatur Howe: But I do not.know what it has to do with this House of Commons.


James MacKerras Macdonnell: I just threw that in. I have been looking for that figure, and when I find it I shall bring it to the minister's attention.


Clarence Decatur Howe: Write me a letter about it.


James MacKerras Macdonnell: The minister and I always agree, in the end, although we often look as though we disagreed.


Clarence Decatur Howe: The assistant financial critic, the boy clerk!


James MacKerras Macdonnell: The last
thing I wish to say is just to point out that we, in the past, have tried to have discussions on the matter of the imperial preference and trading relations within the empire. In fact, we tried it about a year ago, in February of 1950, but at that time our friend the Minister of Finance (Mr. Abbott) in a rather offhand way said that he did not think there was much use in it-
Frankly, however, I do not think the trading problems of the world are going to be solved by simply calling another conference.

Trade Agreements
Anyway, another conference was called, and we can agree with him that it has not solved the problem yet. Then he goes on:
I for one do not like to either initiate or attend a conference unless I know exactly what we are going to talk about.
I hope the minister makes an adequate study of what happened at Torquay, and that perhaps he would read part of my speech so that he would know exactly what we think should be talked about. Then he goes on to say:
While I have no doubt it will be found desirable to hold further conferences to discuss trade matters, I do not know that the holding of a full-fledged commonwealth or empire conference at this time would add very much to the knowledge of this or any other member of the commonwealth in reference to specific solutions which can be found for these trade difficulties.
I hope the minister and the government will reach a very different view, in view of the frank opinions of something near failure of the Torquay conference, such as I have read from the Winnipeg Free Press and, to a lesser extent, from the London Times. The leader of the opposition (Mr. Drew) has indicated a strong desire from most responsible and reputable quarters for such a conference, and I hope with all my heart that this great and important question will not be allowed just to drift any further.


Wilbert Ross Thatcher: Mr. Speaker, I believe in freer trade-I always have, and I hope I always shall. So far as this Torquay agreement goes-well, certainly I do not think any member in the house could find very much objection to it. Whatever steps they have taken must be accepted as progress, although we may be disappointed in the degree of that progress. I think, indeed, that everyone has been disappointed.
This would include even the chairman of the Canadian delegation, Mr. Wilgress, who, according to a Reuters dispatch, said on April 21 that the results were not as great as many had hoped, and pointed out that governments had been hesitant about agreeing to substantial reductions in duties.
As I understand, the chief disappointment in the agreement is that Great Britain and the United States could not get together in a sort of tariff-lowering pact. Had they been able to do that, other countries automatically would have benefited. We had all hoped there would be a kind of softening of the lines of division between the sterling and dollar areas. Instead however I think it is correct to say that those lines have been hardened; and every hon. member knows the implications that has for Canada.
I believe I am safe in saying that United States tariffs were the first and chief targets

of the Canadian delegation at the conference. One of my first criticisms is that the United States out-negotiated and out-bargained us at Torquay. I should like to develop that point at eight o'clock, and for that reason I would ask that you call it six o'clock, Mr. Speaker.


James MacKerras Macdonnell: Mr. Speaker, I rise to a question of privilege, in order to bring a figure to the attention of the Minister of Defence Production (Mr. Howe). The figure of $25 million to which I referred is for the production of the plants at Sorel and Longueuil. The minister's words were:
These plants are already committed to produce some $25 million worth of guns for the United States navy.
What the minister does not say is that that is all we are getting.


Clarence Decatur Howe: Is it all we are getting?


James MacKerras Macdonnell: I am saying that.


Clarence Decatur Howe: You said $25 million was the extent of it. Perfect nonsense!


James MacKerras Macdonnell: We have gone up from $17 million to $25 million.


Clarence Decatur Howe: Perfect nonsense! -
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Wilbert Ross Thatcher: 
John Horne Blackmore: Raw material.


Wilbert Ross Thatcher: On lead from 2%th to l'/eth cents a pound.	.


John Horne Blackmore: Another raw material.


Wilbert Ross Thatcher: They made concessions on zinc, plywood, canned salmon, and so on. In other words, most of the concessions that our neighbours made to us were on raw materials and natural resources. I welcome these concessions to a certain degree, but I should like to have seen more on finished products. It seems to me that in recent years far too many of our exports to the United States have been in primary form, and to a distressingly large extent we have merely exchanged our trees, minerals and the fertility of our farm lands for the processing skill of our American friends.


John Horne Blackmore: Hear, hear.


Wilbert Ross Thatcher: On many occasions we have shipped raw materials to the United States, had them processed there, and then bought them back in the form of finished products.


John Horne Blackmore: Imagine that.


Wilbert Ross Thatcher: 
Clarence Decatur Howe: May I ask the hon. member a question?


Wilbert Ross Thatcher: Yes.


Clarence Decatur Howe: What item of farm machinery is the hon. member quoting? Practically all farm machinery comes in duty free.


Wilbert Ross Thatcher: I used that as an illustration. I should like to refer to Buchanan's Bulletin, registered information on national affairs for businessmen. It makes this statement:
The reductions in the Canadian tariff on industrial items are not spectacular, from 25 to 221 per cent on machinery made in Canada, and from 10 to 71 per cent on machinery not made in Canada.


Clarence Decatur Howe: My hon. friend spoke of farm machinery. He should know that practically all farm machinery comes in duty free. The last item of farm machinery that was taken off the duty list was cream separators under the present budget. Practically all farm machinery was taken off the duty list several years ago.


Wilbert Ross Thatcher: I thank the minister for his correction.


Clarence Decatur Howe: My hon. friend was talking about the duty on farm machinery. I asked him a very simple question as to what item of farm machinery he was talking about.


Wilbert Ross Thatcher: I thank the minister for his correction. I am very pleased to have it. He

Trade Agreements
is correct and I was wrong, but the fact still remains that as to standard machinery what I said is correct. I say that despite the concessions which we have obtained from the United States at these three conferences the American tariff level is still considerably higher than the Canadian. The effect of Torquay, Geneva and Annecy is that it will facilitate the entry of more United States goods into Canada without bringing the United States tariff to a point where Canadian manufacturers can compete in the United States market. I think Canadians are going to be disappointed that something has not been said about armaments. I understood that Canada was going to manufacture arms for the United States. Now it appears that all we are going to make now is parts. I do not know if there is a tariff on munitions that we export to the United States. I assume there is. Perhaps this is one item on which we should have received a concession in these critical times.	.
I say again that the Canadian government vas bested at Torquay by our United States friends, if you judge by the dollar value of the concessions obtained. I think at this time it is proper that we should consider the state of our trade with the United States. I would not deny for a moment the tremendous strides which the government has made in building up our exports to the United States. The fact that they have been able to build up our exports in that market, the most competitive in the world, is no mean achievement, and I do not wish to detract from it. Nevertheless when we recall that in 1950 two-thirds of our exports went to the United States we can see the dangers inherent in the situation. This afternoon the leader of the opposition (Mr. Drew) said we were something like the man who put all his eggs in one basket. That is what we have done so far as our trade is concerned today. As has been pointed out already, the United States market has never been known as the most stable market in the world. Actually the opposite is true. It is subject to economic recessions, and going by past history, tariff policy can change overnight. I wonder what would happen to Canada if suddenly General MacArthur or Mr. Taft should become president of the United States. I think then we might have to worry immediately about higher American tariffs. Therefore I say one of our objectives in tariff and trade policy should be to diversify our trade to a greater extent in future.
The minister or some of his friends may ask how we can do that. Well, there are many possibilities. I have in my hand a

clipping from the Financial Post of April 14, which states that France offers to exchange steel for our newsprint. They want our newsprint, most of which is going to the United States. We are pretty short of steel. There may be objections to such a procedure; perhaps the price of French steel is too high, or there may be other reasons why that is not feasible, but on the surface this would seem to be one way by which we might diversify our trade.
Our second chief trade problem today is the British market. A great deal has been said already about the deteriorating position of that market. In 1949 United Kingdom sales to Canada were only 43 per cent of her purchases from this country. In 1950 they were 85 per cent. Before the war Britain used to take nearly half our exports. Last year she took only one-third, and I think it is safe to say that all hon. members are alarmed at the way our exports to Britain have deteriorated. Prior to the war the British bought a great deal from us. Since the war they have not been able to buy as much simply because they lacked the Canadian dollars with which to make those purchases. British statesmen and opposition leaders in this house have warned the Canadian government repeatedly as to what would happen if we did not permit them to earn more Canadian dollars. To give only one illustration, I remember a Canadian Press dispatch back in 1949, which said:
Cripps issues warning Canada to lose exports unless it "buys British."
Britain will buy less food from Canada unless Canada buys more from Britain, Sir Stafford Cripps, chancellor of the exchequer, said Thursday.
. . . he said the crux of the post-war Anglo-Canadian trading problems is expansion of British exports to Canada.
At that time, two years ago, Sir Stafford Cripps put the trade problem as far as England was concerned right up to this parliament. If Canada wanted to hold the British market he told us we had to buy from them. However in the intervening years, our government has been most apathetic in trying to increase British imports. As a matter of fact this government has taken several steps which have had the opposite effect. For instance, several years ago our government encouraged the British to send textiles to Canada. They said that in order to encourage that trade they would remove the tariff. The British textile industry went to work and produced at competitive prices, and began to earn a great many Canadian dollars. As soon as they began to do that our government decided to put the tariff back on again. Much the same thing happened in the

automobile industry. Ever since the end of the war one cabinet minister after another, one government spokesman after another, has been urging British industry to become competitive, to get their prices down; yet when the British automobile industry did begin to compete, when they did produce a car that could be sold in the Canadian market, right away our government put on a dumping duty.
I cannot reconcile actions like those with a desire to increase British imports, and increase trade within the commonwealth. I think it is fitting also to mention what happened as far as our wheat agreement was concerned. The British government made an agreement in writing with the Canadian government to buy wheat at a fixed price. They fulfilled the terms of their agreement, and did so in writing; yet numerous members of this house accused the British of reneging, of failing to live up to a moral obligation, I do not suppose the British liked such statements very much. I think we in this house should remember that our chief market for farm products in the past has been Britain, as it probably will be in the future. When we do things like that and make statements like those in this house, I suggest that we are jeopardizing that market. Insulting your customers is not a good way to build up trade. I do not think you could do it in any other kind of business.
Mr. Speaker, it is clear now that another world-wide, multilateral trade conference like Torquay is most unlikely. If that is the case, any additional concessions we get must come from direct negotiations. Therefore I agree with other hon. members who have suggested that we should commence further trade negotiations with Britain. Probably we should do the same thing with the United States, and possibly with France and: other countries. Our first objective in these negotiations should be to get back our old, traditional markets, and our second objective, the diversification of our trade. If we can do these things, our trade in future will remain in a healthy position.


Mr. G. C. Nowlan (Annapolis-Kings):: Mr. Speaker, tonight I am not going to presume to assess the results which may or may not have been achieved in the Torquay agreements. We have had many discussions of these trade agreements in the past, as was pointed out this afternoon by the hon. member for Greenwood (Mr. Macdonnell), running from Geneva to Annecy and now to Torquay, and we are led to hope that much good will come out of this one. That is something that can be perhaps better determined by the committee to which this matter will be
Trade Agreements
referred; and certainly we in the house will be in a better position to discuss the question after that committee has performed the functions required of it. However, I do suggest there are one or two questions raised by this report, some of them perhaps of particular interest to the east, to which I should refer tonight.
In connection with these agreements we see that some special arrangements are made with respect to Cuba. We are told that we will purchase some 75,000 tons of sugar annually for the next three years, and it is hoped that as a result we will be able to at least partially regain the position we held at one time in the Cuban market, but which unfortunately we lost. Just what we are going to gain by the concessions given us by Cuba is not clear; that is one of the questions the committee will have to determine. At one time that was a very satisfactory market for our potatoes, and it also took large quantities of fish products from eastern Canada. Then in the late twenties the government of this country negotiated a treaty with the British West Indies, no doubt thinking it was accomplishing a great deal in the development of our trade. I think most Canadians, however, and particularly those in the east will have to admit that as a result of that British West Indies treaty we gained very few benefits, and certainly we lost our markets in Cuba. If by these negotiations at Torquay the government has taken steps to rectify that position it certainly will be an advantage to us.
Then another question is raised. The British West Indies treaty has been in effect since 1927 or 1928. We built a fleet of ships, which we have subsidized. We have spent a great deal of money attempting to develop trade between Canada and the West Indies; but now we see that Mr. Donald Gordon, president of the Canadian National Railways, says that tremendous decisions will have to be made this year. He hopes parliament will provide money to cover the deficit of last year, which I believe was something like $845,000, but he doubts whether further deficits of this size can be covered in this way. More than that, he points out the fact that replacement of ships now in the British West Indian-Canadian service will have to be made if the treaty is to be maintained. Now, sir, there is a serious question.
The second question arising out of this one dealing with Cuba is: having once more sought to regain the Cuban market, are we also going to maintain the developments which we have achieved in the West Indian market? Certainly, there have been some definite advantages gained, particularly to

Trade Agreements
eastern Canada. One of the questions to which I am sure this house, or at any rate the government, will have to determine before many weeks go by is what will be our position with respect to the British West Indian trade in the future. Are we prepared to make the capital expenditure which will ultimately be necessary if these advantages are to be maintained?
There is one ray of sunshine that some of us may see in Torquay, perhaps a minor one. Those in the east, at least in my constituency, will note with some satisfaction that apparently trade arrangements have been made with western Germany. At one time the German market was of tremendous importance to us in the valley in so far as the shipment of apples was concerned. During the years immediately preceding the last war we shipped large quantities of apples there. Of course, that market has been lost to us. We would be interested, and I know the house will be interested, in determining just what advantages we derive under Torquay from the apparent beginnings which we are making towards the resumption of trade with western Germany. But generally, Mr. Speaker, I think that Torquay leaves one with a great deal of disappointment.
This afternoon the member for Rosetown-Biggar (Mr. Coldwell) referred to the triangle from Canada to Great Britain to the United States and back, which has developed over a period of many years. It has been of tremendous importance to all of Canada, but particularly to eastern Canada. Sometimes when we talk politically of the imperial preference one gathers the inference that imperial preference was something which developed under the aegis of the late Viscount Bennett. Our friends are sometimes disposed to shrug their shoulders, as if it were something of which they were not too proud. Of course, we know that imperial preference has been written into our tariff laws through generations. The preference was established by a Liberal government back in the days of Mr. Paterson, who was minister of finance. When Mr. Fielding was minister of finance we had the first imperial preference budget. It was written, into our trade throughout the years, but we received no corresponding benefit from Britain, because she was a free trade country. Throughout the years, we did everything to develop that trade, and1 we succeeded in so doing.
Then in the thirties the matter developed still further, but today we have to face the fact, as suggested by the member for Moose Jaw (Mr. Thatcher) a moment ago, that after Torquay it looks as if these conferences have reached the limit of their resources. From reports we have had about Torquay the
[Mr. Nowlan.l
United States, quite properly, was insisting on the one hand that imperial preference be reduced or be abolished, while on the other hand you had certain commonwealth countries such as the United Kingdom, New Zealand and South Africa refusing to compromise or to do anything with respect to these imperial preferences.


John Horne Blackmore: Good for them.


George Clyde Nowlan: We in this country, because of our geographical position-I am not criticizing for the moment but I think this is a fact-felt we had to make some compromise between the two positions, and we did give away, rightly or wrongly, the preference on some two hundred articles or more in order to get some hoped for benefits out of the United States market. Whatever the situation may be, sir, we know that trade on the triangle has virtually gone. Figures have been given, and I do not want to weary the house with respect to them again, but our trade with Great Britain has diminished until last year our exports to Great Britain fell off some thirty-four per cent; our exports to other countries, outside of the United States, fell off by some twenty per cent, whereas our exports to the United States increased to a substantial degree. Instead of a triangle you have at the best a two-way street. For the sake of argument I will admit for the moment it is a two-way street, but it is a street, sir, which could be mined very easily. It is a street on which land blocks could be established, if not an iron curtain dropped. We could very easily find ourselves in the position where it became a one-way street or no street at all but simply a meandering path on which the grass will grow. Then, our trade will wither and disappear, because we have lost those traditional markets to which we have been accustomed; markets which we in the east have to depend upon if our economy is going to be maintained. It is for that reason we look upon Torquay with misgiving and with doubt.
So far as these concessions are concerned we feel that our government has gone about as far as it felt it could go. Other conference countries, commonwealth countries, refused to go that far. The United States has refused to go any farther. We know that sooner or later this government, or some other government, will have to make up its mind just what position we are going to take in the trading of the world in the future. Certainly, we hope for multilateral trade. Certainly, we hope for a lessening of the trade barriers. But, sir, I think we have to be practical. Living in this world today we have to realize how, not fantastic perhaps, but how very flimsy may be these hopes. This preference is more than a matter of trade to those of us

in the east. Written into the trade agreements of the past there is the benefit of direct shipment, and the fact that preference will only apply to shipments made from the ports of origin in the commonwealth to a port on a river, lake or seaboard in Canada without transshipment.
In his statement the other night the Minister of Finance stated we had safeguarded the principle of preference. I am not quarrelling with that for the moment at all. It is for the future to determine. Since we gave away the benefits on at least two hundred items, then we automatically lost the benefits of direct shipment on those articles coming into Canada. They will now go into New York or Boston.


Clarence Decatur Howe: May I ask the hon. member
what the two hundred items were on which we gave away the preference? We did not give up our preference, but we reduced the preference on certain items.


George Clyde Nowlan: According to the statement
made the other night by the Minister of Finance, and the statement which appeared in the press, we relaxed our preference to that extent. This is a matter which will be developed later, so I am not going to quarrel with the minister now. I am certainly glad to hear the minister make that statement that we gave it up on none, because that is not the impression that has been created in this country. Whether we gave it up on any or relaxed it on any-I do not think this point has been made in this house before-to that extent we lose the benefit of direct shipment to Canadian ports. The people employed in the ports of Halifax,* Montreal, Saint John or Vancouver will suffer as a result of the relaxation of those benefits because that direct shipment clause was an important factor in the imperial preference agreements as originally drafted.


Clarence Decatur Howe: Will the hon. member, at this
stage, accept my statement that there is no impairment of the privilege or obligation of direct shipments and the benefits accruing therefrom. He did not accept it before, he repeated his statement after I made the assertion.


George Clyde Nowlan: I accept the minister's statement, and I am sure that will clarify the situation in Canada which is worrying many at the moment because that is not the impression which has been created. I am sure the minister will also admit that as we do relax or give away the imperial preference on any item, then to that extent we are weakening or undermining the principle of direct shipment which has been an important part of the economy of the ports of Canada during the past twenty years.
Trade Agreements


Clarence Decatur Howe: You assert we are undermining, and I am asserting we are not.


George Clyde Nowlan: I am not asserting we are.
I am asserting that if we are, then that follows. This committee can determine that after the matter has been referred to it. I can tell the right hon. gentleman that papers which have not been entirely critical of this government have certainly suggested that is one of the outcomes of any relaxation of the imperial preference which follows because of Torquay. But we are not debating what may or may not happen. At the moment we are debating the realities of the situation, and the fact that we in Canada are facing an extremely serious trade situation because of the emphasis upon our United States trade and the diminution of our trade with the United Kingdom, the commonwealth countries and other countries outside of the continent of North America.
This afternoon the leader of the opposition referred to the statement issued: out of Toronto last Saturday by the British-Canadian trade group which has been studying our problems, and which had recommended and urged the establishment or the creation of a conference between the governments of the commonwealth in order to study this problem and to attempt to resolve it. Certainly I suggest that we all should support that proposal. If there ever was a time when such a conference was necessary, it is now. No stone should be left unturned. I realize that there are difficulties in the way. I realize that it is not an easy problem to solve. But the more difficult the problem, the more reason for prompt action and the less reason for delay. Having regard to the seriousness of the situation, and in view of the discussions which have taken place here today, I would hope that this government would take some steps to support the suggestion and to urge and to lead in the establishment of such a study in the immediate future.
Ancillary to that, may I say that I was intrigued to read in a press report the statement by the president, I think it was, of the British federation of agriculture-because agriculture, industry and trade were all represented at Toronto. The head of the British agricultural group suggested that the time had come when there should be, and would be on the part of the British government, greater relaxation of trade restrictions in so far as the importation of Canadian food products are concerned. I know the Minister of Agriculture (Mr. Gardiner) must have studied that statement with some particular interest.
In that statement some reference was made to the fact that the cheese contract showed

Trade Agreements
a relaxation at least on the part of the British of their fixed determination to engage in bulk purchases. Those of us in the apple industry know that last year Great Britain relaxed the restrictions upon the importation of apples from all the sterling areas. In other words, New Zealand, South Africa and Australia exported their apples to the trade in Great Britain, and the apples were .bought and sold direct without restriction; possibly that was only because they were in the sterling areas. But it has been suggested by more than one competent authority, or at least has been suggested, by one who had information on the matter, on Friday night in Toronto, that this coming year arrangements could be made whereby Great Britain would import apples from Canada, independent of and apart from bulk purchases and for distribution direct to the trade.
The minister will know that last year importations were made and that purchases of apples were made direct from the trade in British Columbia and Nova Scotia, without the intervention of this government; and that was a step in the right direction. I suggest that there is now more than a possibility and that apparently, according to these men who are now here, there is a probability that, if we take the right steps and follow the right course, this year we can arrange for the direct sale of apples from Canada- from British Columbia and from Nova Scotia; those are the two great exporting, production areas-to Great Britain, to the trade there. It has been suggested that a mission ought to be set up there, representative of the two apple exporting areas, to handle our apples and to sell them direct to the trade. If that could be done, it would be of tremendous importance to the apple producers not only of British Columbia, I assume, but certainly of Nova Scotia.
We know that there are governmental committees engaged on various projects. We know that there is always consideration given to the problem of the dollar and sterling areas. We know that each year during the past two years the British-after discussion, after debate, after waiting, after the apples were probably picked, when no one knew whether they were going to be, sold or not-made an agreement whereby they purchased a substantial quantity of our apples. I suggest that this year we take time by the forelock, that we do not wait until the frosts come next fall, that we pursue the matter now and that, if possible, we make arrangements so that the apples may be sold, in order that the producers will know of it well in advance.

Those are some of the minor and perhaps ancillary matters arising out of the discussion this afternoon of the Torquay agreement. By dealing with these matters, and by working at them unitedly and intelligently, we can and must solve the problem of regaining these markets in the sterling area; otherwise the economy of eastern Canada at least will be most seriously impaired in the future.


Mr. Arthur Laing (Vancouver South):: Mr. Speaker, I will be exceedingly brief, but 1 have heard such a spate of despondency over something that I had persuaded myself we should be overjoyed over, that I think someone should make a statement perhaps with particular reference to his particular part of the country.
I do not know whether the Minister of Trade and Commerce (Mr. Howe) has received many compliments from the province of British Columbia, but I am going to say that, if he has not, he should have, over the agreement which has been concluded. The general basis of the criticism has been that we were unable to get into the broad phases of over-all trading the world around. Theoretically, from that criticism we can only deduce that Canada is to be blamed for not taking complete leadership in everything. Perhaps Canada is to be blamed for the condition the world is in, if we carry that proposition to its logical conclusion. It always takes more than one to make a bargain; and in a conference of this kind, it takes a great many more than one to do so.
I have been readin'g the United States periodicals and the British papers, and I have been led to believe that Canada came out best of all of the countries in the conference. We in British Columbia were particularly delighted for a variety of causes. I am going to adopt the policy that was adopted by the opposition when they were dealing with the increase in the sales tax, and quote the decreases percentagewise. In the case of aluminum going into the United States, we secured a reduction of 25 per cent in the United States duty against Canadian aluminum. That is going to mean a tremendous boon to our province of British Columbia because we are getting a huge development by the Aluminum Company of Canada which is going to alter entirely the face of our province, particularly in the region represented by my good friend the hon. member for Skeena (Mr. Applewhaite). That development is going to change the entire face of the province of British Columbia. This reduction will induce the early sale of their product in the United States. In zinc ores there is a reduction of

15 per cent in the duty; in zinc blocks, there is a reduction of 14 per cent. The hon. member for Moose Jaw (Mr. Thatcher) said something to the effect:	Oh well, those are
only things that the Americans want anyway. That is not a sound argument, Mr. Speaker. Of course they are things that the Americans want; but likewise they are things of which the Americans themselves produce vast quantities; and the reduction of their duty against our product makes it that much easier for our product to enter their markets. He seemed to indicate that we had given reductions in American manufactured goods. Why, of course! I understood that it was Canada's policy to have multilateral trade, to trade with everybody who would trade with us. A trading arrangement is a twoway street, as one of the hon. gentlemen opposite has already said. In order to get you have to give something. I think for the manufactured goods and the concessions that we have given we have reduced the cost of those goods to our Canadian consumers by that much, and it will not affect Canadian enterprise in any particular.
The next item to which I am going to make reference is the most important item of all, namely, Douglas fir plywood. We secured a reduction in the United States market of 50 per cent; in other words, a reduction from 40 per cent down to 20 per cent. This is of redoubled importance to us because it means a further manufacturing of our timber resources. There was a time in British Columbia when we British Columbians used to look askance at people who came along with rafts of logs with the bark on and threw them into the holds of boats which went to Japan. After that the best we could do for many years was to sell what we called squares. They too were manufactured abroad into finer lumber, or finished lumber. This agreement means that we are getting the most out of our lumber when we put it into plywood; and the plywood manufacturers in my riding tell me that even at 40 per cent they were almost able to get into the United States market. They tell me that at 20 per cent they will now have no difficulty at all. And we were wise enough to secure a reduction in the steel knives which cut our plywood, and they are a terrific expense. They are a knife I think of about 30 or 32 inches, and I think they run somewhere in the neighbourhood of $300 a piece, and they wear out fairly rapidly. We secured a reduction in those knives. The best knives are made in the United States, although they come from European countries as well. But the great development there is that we are going further with our manufacturing. And 80709-207i
Trade Agreements
today in broom handles, in paint brushes and in other things we also have advantages in that market, and now in plywood. I would suggest that we are getting out of our lumber resources three labour dollars for every one that we took 20 years ago. That is of tremendous advantage to British Columbia.
We have obtained a reduction in that market in canned salmon of 40 per cent. I do not know how great that may be to us in British Columbia. I rather imagine that we have pretty adequate markets for our salmon in British Columbia at the present , time; but I want to emphasize that this is a long-range deal. Had anything of this nature been announced in our province in the period 1925 to 1940 it would have been greeted as the greatest news that ever came to our province; and if there is any tendency at the present time just to accept it as another announcement it is because our industries are exceedingly busy at the present time, and have markets for nearly all the products that they can produce. But again I say this is a long-range proposition, and we should solidify and consolidate it as time goes on.
As I said, I wanted to speak just for a very few minutes, because after being a loyal Canadian I am a loyal British Columbian, and this agreement is of tremendous advantage to our province. I should like to say that our people in British Columbia are almost unanimously of that opinion, too. We have in this country today I think only two great sources of money to keep everything going. One is the wages of labour, and the second great source is the annual income of the Canadian farms from cash crops.
As a result of this agreement we are certainly going to step up the industrialization of the province of British Columbia, which is already a very great industrial empire. I should like to add my few words to those which the minister himself graciously gave to the splendid staff that Canada sent over there, headed by Hector McKinnon. I know some of the other men in agriculture, and in various other phases who accompanied the mission, and who I think did a magnificent job for Canada within the territory in which they were permitted to work.


Donald Methuen Fleming: Mr. Speaker, some of us who in the debate on May 3 urged on the government that an opportunity should be provided for the house to debate trade policies in general and the Torquay agreements in particular welcome the opportunity afforded by.the present resolution to discuss these two very important topics.

Trade Agreements
It is just as well perhaps, Mr. Speaker, that the importance which the house attaches to subjects brought before it for discussion is not measured by the time actually spent on them; otherwise, so far as this session is concerned, it would appear that the house does not attach great importance to the subject of trade; for this is the first occasion that has been offered to the house to debate trade policies, so far as I recall, at the present session.
Trade, Mr. Speaker, has certainly lost none of its importance for Canada, and in approaching this subject we are approaching something which is part of the economic life-blood of our country. In the early post-war years we used to speak very freely about the fact that Canada had risen to the third place among the great trading nations of the world; that she was perhaps more dependent upon export markets for the employment of her people than any other country in the world; that three out of every eight persons in Canada owed their employment to our export trade. And although perhaps the proportion has been reduced slightly, to about one-third, nevertheless the subject is one of paramount importance for every Canadian. Therefore, Mr. Speaker, I think that the house should welcome this opportunity of spending a little time considering trade, and in particular these agreements which have been announced by the government as having been concluded at Torquay.
The hon. member for Vancouver South (Mr. Laing), who has just spoken in fulsome terms of the way in which the agreements have been received in his province, has used quite strong expressions. He has pictured the people of his province as overjoyed. Now, Mr. Speaker, to the extent to which there are benefits in these agreements for the people of Canada I am sure all hon. members will be glad to commend them. At the same time the house will not fail, I am sure, in the discharge of its duty to examine the price that is being paid for the benefits that have been gained, and also to measure what has been gained against the hopes that we were led to form in anticipation of this conference, and also to compare these benefits with the picture that has been given to the house by the government concerning the effects of these agreements.
Those who sat in the house when we were called to meet at the beginning of December, 1947, and recall the way in which the government at that time introduced the Geneva trade agreements, and saw later the way in which some of the colour came

out of the picture on closer examination, will, I think, perhaps approach the government's rather grandiose description of the benefits of these agreements with at least a measure of reservation.
One recalls so well that broadcast to the nation on the evening of November 17, 1947, when the then prime minister went on the air and announced that as a result of the trade agreements which had been negotiated by the Canadian representatives at Geneva the new heaven and the new earth had come. And then, as soon as the prime minister had finished, the Minister of Finance came on the air to announce to the Canadian people that the advent of the new heaven and the new earth was postponed because it was felt necessary by the government to apply what were then absolutely illegal and unconstitutional taxes and restrictions upon imports into this country, measures applied by orders in council, which eventually found their way into the Emergency Exchange Conservation Act.
And so the new heaven and the new earth announced by the prime minister on that occasion were at least postponed. And by and by we found we were going to obtain only part of the new heaven and the new earth, at best, because only part of the Geneva agreement has ever come into effect. If I remember correctly the statement made a few days ago by the Minister of Finance, if not one made in an earlier session, the Geneva agreements have come into effect with respect to about half of the items to which they purported to apply. And even on that limited basis the effect of the Emergency Exchange Conservation Act over a period of three years was to reduce still further the area within which the agreements were permitted to operate.
Some of us in approaching the present agreements, however hopeful we may be, cannot dismiss from our minds the recollection that every time the government has come out from a conference it has announced at that time whatever it had to offer in the way of an agreement as though that were the advent of the new heaven and the new earth. This necessarily leaves those who have grown accustomed to these tactics with the feeling that we must approach the government's statements with at least a generous measure of reservation.
I am sure that on the part of every member in the house there will be a desire to commend the able representatives of this country at Torquay. They included some of the ablest of men in our civil service, men of whom the country is justly proud. I am quite

sure that through them Canada was able to discharge her part in those negotiations with credit, in the manner in which the negotiations were carried out.
I have a feeling, sir, that if the government would really break down and forget, for once, trying to sugar everything that it brings before the house, or paint everything it has done in glowing colours-it is my view that if the government would really break down and be candid with the house it would tell us that it has been disappointed with the results at Torquay.
What was accomplished at Torquay? Well, we will welcome the extension of the Geneva agreements for a further period of three years, to January 1, 1954. Then, as to the other fact that has been put before us as an accomplishment, namely the negotiation of sixteen new agreements, I suppose we are glad to see agreements in a world in which it is necessary more and more for the free nations to show the nations behind the iron curtain that the free nations are prepared to work together. Trade is one way in which we believe we can work together.
Having said that, I think we must admit- and I believe if the government were frank it would also admit-that the sixteen agreements are rather narrow in scope. And, even apart from those two factors, the rest of the negotiations at Geneva has been written into a record of failure and disappointment. I do not say, and I wish this to be clear, that the failure is attributable to Canada or to the Canadian representatives. Unquestionably the position taken by some of the nations represented at Geneva made it exceedingly difficult for Canada, and other countries that would have liked to enter into agreements with them, to do so.
Nevertheless we must, in reviewing these agreements, try to see them in their true light and, so far as we can, in their precise proportions. And whatever may be said on their behalf, the fact of the matter is that their benefits are very narrow in scope; and, on the whole, the Torquay agreements in years to come will be remembered largely, I suggest, because of the disappointments that were encountered there.
Torquay is not the only milestone in the post-war record of disappointments in the field of trade negotiations. How hopeful we were in 1945 and 1946! We looked at the draft charter of the international trade organization and we saw a new spirit in Washington, a new attitude toward freeing the channels of trade in the world. We saw throughout the free nations of the world what on all sides appeared to be a desire to further and to extend world trade on a multilateral basis.
Trade Agreements
We were all filled with hope. That, of course, was in the days before Russia had shown to us that she was determined to sabotage every effort of the rest of the world to advance toward either prosperity or peace. And it was also before some of the harder facts of the trading position of many nations were fully appreciated.
We did not appreciate in those days the difficulties Great Britain was shortly to face with respect to her trade and her currency. We underestimated, I think, the material exhaustion of the nations of western Europe; and we certainly underestimated the complexities involved in multilateral trade negotiations.


John Horne Blackmore: Hear, hear.


Donald Methuen Fleming: That belongs to history now. I think most of the free nations of the world tried to do their best, with due regard for their own interests, to give some play to the principles of multilateral trade. But, apart from Geneva and some very limited success at Annecy, and even more limited success at Torquay, it seems that many of those high hopes that were held five years ago have passed now into the limbo of disappointments.
We will not forget, either, in measuring the benefits we have enjoyed as a great trading nation, the fact that we owe much to the enlightenment which has distinguished not only trading policies in the United States, but also those policies that have sought, even at considerable cost to the American public, to assist other nations on the path to recovery. Whoever in this world, living twelve years ago, could have foreseen that the policies of the United States which, up until that time, from the Canadian point of view presented a great handicap and barrier to the freeing of the channels of international trade, would have been supplanted by policies which have been marked by generosity rarely equalled in history? And Canada has been the beneficiary of those American policies of trade, and those economic policies which have been designed to assist Europe back onto its feet. The European recovery plan gave great benefits to Canada.
I think the house will welcome, in general, the proposal to send these agreements and the accompanying documents to the standing committee on banking and commerce for more detailed examination. That, I think, is a highly proper course with respect to a measure of this kind, particularly as it seems to me some attempt will have to be made with respect to many of these items to measure the advantages against the possible disadvantages involved for Canada. We shall have to work within obvious limitations, and the

Trade Agreements
judgment that we shall apply in the committee or in the house must necessarily be tentative, until the agreements have been in operation and there has been an opportunity to see them at work.
However, I think we may well pause to consider the rather limited terms of the reference to the committee, and shortly I should like to say a word concerning the terms of the resolution and to compare it with the course the government invited the house to follow with respect to the Geneva agreements in the session of 1947-48.
May I first offer some comments with reference to the background against which we ought fairly to measure either the benefits or the disappointments of the Torquay agreements. I am not going to weary the house with statistics. As a matter of fact very few statistics need to be emphasized now beyond those that have already been recorded in the course of the debate this afternoon. But let me deal with our fundamental problem, and it is a problem. Whatever joy we may take out of the fact that our markets in the United States have been expanding as a result of the stockpiling policies of that country, the fact nevertheless remains that our trade problem increasingly becomes one of seeing our eggs to an ever-growing degree being placed in one basket.
Let us look at the figures for only the last two years. I will not trouble the house to go back beyond that. In 1949 our total export trade amounted to $2,993 million. Of that sum we exported to the United States $1,503,459,000, or 50 per cent in round figures. To the United Kingdom we exported $705 million in round figures, or 23-5 per cent. To the other commonwealth countries we exported $310 million or 10 per cent of our total exports. That means that in 1949 we exported half our produce to the United States and one-third to all commonwealth countries.
What is the picture in 1950? Our total export trade expanded to $3,118 million, the largest figure in our history. The United States purchased $2,021 million out of that total, or 65 per cent of the aggregate. The United States, even with a much larger total of exports, moved up from 50 per cent the year before to 65 per cent of that considerably larger total. United Kingdom purchases dropped from $705 million in 1949 to $470 million in 1950, and that figure represented only 15 per cent of our total exports. That is a fact that must arrest the attention of the house and give concern to the Canadian public.
Our exports to the United Kingdom dropped from $705 million in 1949 to $470 million

in 1950, and in that year they represented only 15 per cent of our total exports. In 1950 the commonwealth countries purchased $185 million of our exports, a very substantial drop from the $310 million the year before, and at that figure of $185 million they were only 6 per cent of our total exports. Therefore, as applied to the larger total of exports in the year 1950 compared with 1949, we see that the United States has moved up from 50 to 65 per cent, and all commonwealth countries, Great Britain included, have dropped from 33 -5 per cent to merely 21 per cent. Only one-fifth of our exports went to all commonwealth countries combined last year.
One has scanned the figures for the first two reported months of this year 1951 in the hope that the trend would have been arrested, but we see that for the first two months of the calendar year 1951 our exports to the United Kingdom have dropped-I will give round figures-from $79 million to $73,600,000, and total exports to all commonwealth countries are about what they were in 1950. In those two months our exports to the United States have increased from $260 million to $339 million. Now, sir, let us be fair. We are glad to see the increase in our exports to the United States, but let us remember that they are due to what may be temporary policies. These high exports to the United States are due to their policies of stockpiling, but even if it is only temporary we are glad to see the trading gap between Canada and the United States, which has traditionally existed, being closed under pressure of world events.
But no Canadian can view with any degree of equanimity this situation when our exports to the United Kingdom have shown this very alarming decrease accompanied by an equally alarming decrease in our exports to all other commonwealth countries. When I say all commonwealth countries I am referring not merely to the aggregate; I am referring to all commonwealth countries because it is one of the alarming features of our trading statistics of 1950 that the decrease in our exports to commonwealth countries applied right along the line. All commonwealth countries were purchasing less from us than in the previous year.
In the face of that situation what is the course that we urge upon the government? We urge, as we have consistently urged, that the government should take every step open to it to arrest this alarming decline in our exports to the commonwealth countries, and in particular to the United Kingdom, that great traditional market, a great market particularly for the primary produce of Canada. This danger of which I have spoken, of putting all our trading eggs in one basket,

is a danger that confronts the primary producer in this country more than it does any other person in our Canadian economic system. Therefore as one who regards the primary producer of this country as still the bedrock of the soundness of the Canadian economy, I make no apology for attaching the highest importance to this decline in our exports to the United Kingdom and to all commonwealth countries.
It is a fact that stares every one of us in the face, and I submit that the house cannot be content to sit back and watch the government apparently viewing this alarming decline with apathy. In case hon. members think that is a little strong, may I come back to this point, that we have urged upon them the calling of a conference of these very nations who are purchasing less from us, as I have indicated. Why should we not sit down together and see if we cannot do something to eliminate the very real difficulties that stand in the way of restoring the kind of trade they were doing with us previously? It is not simply a case of trying to expand our trade. It is a case now, so far as Canada is concerned, of seeking to win back markets that we have been steadily losing in the past fifteen months at an alarming rate. It is not good enough simply to sit back and watch that going on under our very eyes. It is far too dangerous a trend for any Canadian to sit back and watch without grave concern.
There are difficulties on the other side of this picture. The difficulties are not simply on the part of Canada, or any unwillingness on the part of Canada to trade. We will frankly realize, if we approach the problem realistically, that there are in the policies being followed by the United Kingdom government difficulties in the way of increasing trade between Canada and the United Kingdom. The bulk purchasing policies of the United Kingdom government have not in the long run assisted Canada's export trade to expand, no matter what some of the ministers opposite may say about temporary benefits. As a country we have not had much benefit from some of the bulk purchasing policies followed by the socialist government of the United Kingdom which has been directing many of its bulk purchases to countries which are competitors of ours.
The difficulties in the field of exchange are very great; unquestionably the negotiators who represented Canada were confronted with the problem very frequently. But, sir, when difficulties arise do we simply sit down and say it is no use, and throw up our hands? I say this situation is too serious to justify an attitude of that kind. Not once, but on
Trade Agreements
many occasions we have urged the government to call a conference or to recommend the calling of a conference by other nations within the commonwealth, in order that sitting together we might seek to grapple with this problem and see if we cannot at least reduce some of these very real and admitted difficulties in the way of the expansion of trade with one another. The house will not have forgotten that on February 28, 1950, a motion was introduced in this house on behalf of the official opposition by the hon. fnember for Lake Centre (Mr. Diefenbaker) which will be found at page 308 of Hansard for that date. This was on a motion to go into supply; and after moving that all words after the word "that" be stricken out the official opposition sought to substitute this motion:
this house is of the opinion that the government should take immediate steps to convene at the earliest possible date a conference of the nations of the British commonwealth and the countries of the empire to devise policies to restore our lost markets, and thereby to provide jobs for our Canadian people.
If one turns to pages 337 and 338 of the same volume the unhappy fact will be noted that the government whipped up its big majority to defeat that motion by a vote of 148 to 55. What was the result? A situation which was then commencing to assume serious proportions was permitted to assume more and more imposing proportions until now the export trade of this country to Great Britain has dropped from $705 million in 1949 to $470 million in 1950, and to commonwealth countries from $310 million to $185 million. I do not say that whole drop could have been avoided by the calling of a conference. We have to be frank and admit the difficulties which brought about this situation, helped along by policies the British government felt compelled to adopt. But there is no possible extenuation for the failure of the government to do what ought to have been done to meet these conditions by seeking to call a conference at which everything possible would have been done by men of good will from our sister nations within the commonwealth to at least reduce those difficulties. So time has gone on and the situation has steadily become worse.


Gladstone Mansfield Ferrie: Water under the bridge.


Donald Methuen Fleming: Well it would not have been water under the bridge if the government had adopted the very constructive suggestion offered by the Progressive Conservative opposition on that occasion. We would not now be facing a situation in which our exports to the markets of the United Kingdom and the commonwealth countries have

Trade Agreements
experienced this further critical drop. And when I speak of the serious drop that has occurred in the last fifteen months, I do not confine to that period the falling off in our exports to the United Kingdom and commonwealth countries. That has been going on for some years, ever since war purchases dropped out of the picture. But the situation became infinitely more critical during the fifteen month period beginning toward the end of 1949 and running now into 1951. A great deal of this loss of trade would not have been water under the bridge today if the government had been prepared to move in the direction they were asked to move at that time and on other occasions.
I said something about the procedure indicated by the government on this occasion. What I have just said relates to the background of the trading situation against which we must measure the Torquay agreements to judge their value and relative importance in influencing a trade situation that has been characterized by an increasing lopsidedness. In 1947, after the Geneva agreements were signed and the then prime minister made the announcement on the air to which I have referred, parliament was summoned at a very unusual time. The reason given was that parliament was to be asked to meet on December 5, 1947, for the purpose of ratifying the Geneva agreements. Such was the importance of those agreements, such was the urgency attached to their ratification by parliament, that nothing short of immediate ratification was proposed at that juncture. So parliament was called to meet two and one-half weeks before Christmas. If you will examine Hansard for December 5, 1947, you will see at page 2 a paragraph in the speech from the throne relating to the course the government asked parliament to follow with respect to the Geneva agreements. That paragraph read:
A permanent solution of our exchange problems and the future well-being of the nation depend upon the revival of world trade. An important step forward in this direction has been the successful conclusion of the recent discussions at Geneva. A positive achievement was the conclusion of trade agreements with eighteen other nations.
Then mark these words, if you please:
You will be asked to approve these agreements. Canada is now represented at the United Nations trade conference in Havana, which it is hoped will result in the establishment of an international trade organization along lines agreed to at Geneva. The trade agreements and the establishment of an international trade organization will provide a sound foundation for the expansion of world commerce, production and employment.
I have already alluded to the fact that the Geneva trade agreements were to a substantial degree neutralized by conflicting policies adopted at the same time by the

government. But to contrast the course the government invited parliament to take at that session with respect to the Geneva agreements with the course suggested in the present motion may I refer to the resolution introduced in the house, which will be found at page 106 of Hansard for December 9, 1947:
That it is expedient that parliament do approve the general agreement on tariffs and trade, including the protocol of the provisional application thereof-
Then it goes on to set out the various documents, and in conclusion states:
-and that this house do approve of the same, subject to the legislation required in order to give effect to the provisions thereof.
In the course of the debate objection was taken to parliament being called upon to vote approval of those agreements before there had been detailed examination of them. On March 12, 1948, the then prime minister introduced the following motion, which was seconded by the present Prime Minister, and which will be found at page 2145 of Hansard:
That the subject matter of the general agreement on tariffs and trade, including the protocol of provisional application thereof, together with the complementary agreement of October 30, 1947, between Canada and the United States of America, be referred1 to the standing committee on banking and commerce.
You will see, sir, that the resolution is one which has been followed quite closely by the government in the resolution now under debate. I make this one observation in respect to the course that was followed in the banking and commerce committee and in the house. Following the adoption of that motion on March 12, 1948, the committee held several meetings and it heard some evidence. Then, the committee suddenly ceased to be called. The Geneva trade agreements rested literally in the lap of the banking and commerce committee, and that was the last that was heard of them. They have never been approved by parliament. The resolution which was introduced by the government at the beginning of that session was never disposed of because the agreements, apparently by the deliberate tactics of the government, were never reported back and have never been debated since.
Now, attention has been called in the debate today to the fact that the committee on banking and commerce is not being called upon to make any recommendations with regard to these agreements. The resolution simply proposes that the subject matter of the Torquay negotiations be referred to the standing committee on banking and commerce. What happens after they are referred there will remain, I suppose, in the inscrutable realm of government strategy. If it

suits the political interests of the government to have a resolution passed in the committee reporting these Torquay negotiations back to the house, unquestionably that will be done. If it suits the political fortunes of the government that the study of the agreements should die in the committee, no doubt that is the fate that awaits this agreement, just as it was the fate that overtook the Geneva agreements in 1948.


Stanley Howard Knowles: The committee only has the subject matter of the agreements referred to it, not the agreements themselves.


Donald Methuen Fleming: The committee has the subject matter of the agreements, but apparently will not be given the opportunity of passing judgment directly on the agreements.
Now, sir, it seems to me that this method, while commendable from the point of view of getting before a committee the details of the negotiations, is not a satisfactory method, having regard to the relationship between the committee and the house; and the relationship between the government, acting in pursuance of such powers as it possesses in the matter of negotiating a trade agreement, on the one hand, and the house on the other. It is no happy reflection upon the Canadian parliament, as it certainly is no happy reflection upon the government opposite, that measures such as these Geneva trade agreements which were pictured to be the new heaven and the new earth, in that broadcast of November, 1947, so important that parliament was summoned to meet on the eve of Christmas to pass judgment on them, were simply allowed to be forgotten. Such a course reflects no credit on the Canadian parliament, and it certainly reflects no credit on the government opposite. While I repeat that I am glad to see the banking and commerce committee given an opportunity of reviewing the details of these negotiations, I am nevertheless regretful that the government now proposes to simply follow a course which is a repetition of an incident which does not reflect credit on parliament or the government.
The government goes ahead with trade negotiations on what we were led to believe was a very broad and important scale, in pursuance of the powers it possesses to reduce the Canadian tariff. Surely, sir, if those measures have the importance pretended on their behalf by the government, this parliament should have the opportunity of passing judgment on them, whether favourable or unfavourable. It seems to me that what we have before us is a very halfhearted permission from the government to have a
Trade Agreements
peek at the details of the agreements, but apparently no opportunity of expressing some judgment upon them. I urge, Mr. Speaker, that the terms of this resolution should be broadened so that when the committee meets it will not be stultified, it will not be confined, but as a committee possessing the dignity of parliament will be a responsible committee to consider the matter which the government pictures as one of importance, and will have an opportunity of conducting such a review and inquiry with respect to these negotiations and agreements as will be a credit to the Canadian parliament.


Clarence Decatur Howe: Mr. Speaker, the purpose of this resolution is to refer the documents executed at Torquay to a committee of parliament for the information of the members of the committee, and for such report as may emanate from the committee to the House of Commons. Objection has been taken that the committee cannot change the agreement. Well, I agree that is the situation. To have forty countries enter into tariff negotiations and not make it possible for representatives of those countries to bind the governments that they represent to agreements reached during the conference would of course make tariff negotiations of this kind impossible. All the countries at Torquay were acting under executive authority. For the United States, Canada, Great Britain, all the countries there represented, the executive of each took the responsibility for signing the agreement on behalf of his country. It is the method followed by British countries, and it has been accepted in countries outside of the British commonwealth.
I do hope that the committee will give careful study to the results at Torquay, because it seems to me that this uninformed debate we are having indicates -that a study of the terms of agreement will be very helpful, particularly to members of the opposition who have spoken. We are told tonight that the results at Torquay have been unimportant to Canadian trade. I believe that many parts of the country will take a different view. We have heard the viewpoint of British Columbia, and I believe we shall get an even stronger viewpoint in the same direction from the maritime provinces. I believe the farmers of this country-


Mr. Hatfield:: No, no.


Clarence Decatur Howe: The hon. member sees no virtue in anything but potatoes. We did not do anything about potatoes but we did get concessions for other maritime products.
We are told that Canadian -trade is in a very serious situation, but that the whole

Trade Agreements
situation can be saved by calling an empire conference. If hon. members were reading the newspapers they would know that an important trade conference is taking place in the city of Ottawa today with a high level team of British and Canadian experts. On the British team are the heads of three departments of government, the treasury, the board of trade and the ministry of food. This trade conference will continue throughout the week. I can say that conference is to be followed by a trade conference with the republic of France; that is to be followed by a trade conference with the British West Indies; that is to be followed by a trade conference with New Zealand. I believe this government is not wholly oblivious of the fact that conferences may be helpful.
The minister of external affairs (Mr. Pearson) has called my attention to the fact that last year Canada attended 169 conferences, so that if conferences, the cure-all of the opposition parties, can be helpful, I think we have done well by international conferences.
We are told that our Canadian trade is in a dreadful position. I will admit that the Conservatives have come quite a distance since 1911 when they said: No truck or trade with the Yaqkees. They now admit that some trade with the Yankees is not too bad, but they say that we have far too much of it at the present time.
Then trade figures are quoted to show that our trade with the United Kingdom has fallen off tremendously. I was interested in the base figure that was used by the leader of the opposition (Mr. Drew). He used the trade figures for the year 1943. In 1943 Canada was at the top of its production of munitions of war and we were sending those to England in tremendous quantity, with no price tag on the munitions. We built up a tremendous trade in that way, but it was wholly abnormal, of course. Using that base, he showed-


Edmund Davie Fulton: He did not use it as a base.


Clarence Decatur Howe: He started with the year 1943 as a base.


Edmund Davie Fulton: He did not say it was a base. He just started there, it is true, but he did not say it was a base nor did he look upon it as a base.


Clarence Decatur Howe: We will call it a point of departure, then. In other words, his comparison was with the year 1943. Then he showed that after we had that level of trade established in 1943, through to about 1947, it began to drop away. But what he did not say was that today the trade between Britain and Canada is exceedingly high, compared with any pre-war year in history. It is still high. tMr. Howe.l
It is true we have not trade in munitions of war, but we are still doing a big business in the United Kingdom and with the empire, comparing the figures of today with any prewar trade figures.
There is a certain limit to the trade that a country can have. A country cannot export more goods than it produces, minus the goods that it consumes within its own borders. That is the limit of exports, and we have been producing exports up to that limit continuously since the year 1943. I will take the same point of departure as that taken by the leader of the opposition; we will use that as a base. Every year since then we have been selling everything that we could produce. I claim that no country can do more than that in the line of exports.
There is a limit to the amount any country can import. That limit is the amount that it can afford to pay for imports; and we have been importing about to that limit.
It has been said that we have been increasing unduly our exports to the United States. Why have we been doing that? We either had to d'o that or we had to limit our imports from the United States; and this country cannot get along without substantial imports from the United States.
My hon. friend has referred to the session of 1948, or of 1947, I believe it was.


Edmund Davie Fulton: 1947.


Clarence Decatur Howe: Yes, 1947. At that time we were going bankrupt in United States dollars. In other words, up to that time we were exceeding our ability to buy in the United States. We had to meet that situation. We met it partly by cutting back our imports from the United States, but we met it to a larger extent by building up our exports to the United States and thus building up our ability to import from the United States. It seems to me that that was the logical development of trade. Today our trade with the United States is not in balance but, counting shipments of gold and certain invisibles, we are certainly trading on a basis that is manageable and that is within our ability to pay for imports.
The United Kingdom has been in the same 'position in its trade with Canada. We have never refused to export anything to England; we have pressed exports on England every year; and England has bought to the extent of her ability to pay. We have been told repeatedly by representatives of the United Kingdom that Britain would gladly spend in Canada all the dollars that she could' earn in Canada. Canada therefore has promoted the sale of British goods in Canada; and exports to this country from Britain are today at far the highest level in the history of either

country. In other words, we have been building up our trade with the United Kingdom by building up the ability of the United Kingdom to pay for goods purchased in this market. Through our efforts and through the co-operation of the British government, the balance of trade today is in favour of the sterling area. In other words, the sterling area is selling Canada more goods than it is buying from Canada. Surely that is a sound position for both countries to be in, because it removes the balance of payments situation as an impediment to trade and it places both countries in a position so that the trade of each can increase, step by step and in parallel.
Our trade with South America has been increasing greatly, particularly in the last several months. There again that represents a fairly well-balanced trade presently somewhat in our favour. Our over-all trade position is that exports and imports are almost in balance. In 1950 the figure for our imports was slightly larger than that for our exports. Usually there has been a slight difference in in our favour; that is, exports were greater than imports. Surely that is a sound trading position.
We speak of the old triangular pattern of trade. Under that pattern, we made most of our purchases in the United States, sold most of our products to England and said to England: You pay our bills in the United States; we cannot find the dollars; you must do it for us. That was the triangular pattern of trade. We bought in one market, sold in another market and asked our two principal customers to square up our balances with each other. Today our trading position with all our customers is nearly a balanced one, as nearly as it is desirable to get in the nature of multilateral trade in which Canada participates.
We are. told that we are sacrificing the British preference. As a matter of fact, we have given up no important British preference. The margin has been cut on a few items. At the Annecy conference Britain, for reasons that were good to both Canada and the United Kingdom, unbound the preference margin as far as the United Kingdom was concerned; and in a few items the margin of preference has been shortened. But no important preference has been given up and no preference has been taken away from any empire country.
A good deal has been said about empire preferences. Hon. gentlemen opposite speak as though those would be the salvation of any situation. Any British country can ship to Canada and can take advantage in Canada of the British preference. But I know of no
Trade Agreements
article that Canada can ship to any British country freely and as to which Canada can obtain a British preference. The preference is on the statute books, but behind the preference is a prohibition or a quota. Therefore, unless trading methods change within the empire, I doubt whether the British preference is going to find markets for us within the empire. With the improvement in the balance of exchange that I have mentioned, I hope that those quotas and prohibitions may be removed1, in time; if so, the British preference will be to the advantage of Canada. But today Canada is not gaining the advantage of the preference which inures to other British countries trading into this market.
I do not know that I need to touch on any other remarks in this debate. It was suggested that we have not been standing behind India. It was said that we should have given wheat to India. Well, I can say for the benefit of the house that we delivered wheat to India this year. We delivered our last cargo just a few days ago. We have delivered to India in this calendar year 300,000 tons of wheat, which represents something over 10 million bushels. I think that 300,000 tons of wheat from Canada compares reasonably well with 2 million tons just voted for delivery to India by the United States. It compares very well with 50,000 tons from Russia, and a very much smaller amount from China. I think it is well for hon. members to know these facts when they are being critical of the government for our not doing anything to help out this situation in India.
Then we are told that the only reason we are selling our products in the United States, apparently the only reason we are able to export at all, is due to stockpiling in the United States. I can say to hon. gentlemen that that is utter nonsense.


Donald Methuen Fleming: Nobody said that.


Clarence Decatur Howe: That was said by two speakers of the opposition.


Mr. Casselman:: It was given as one of the reasons.


Clarence Decatur Howe: If that was one of the reasons, let us dispose of that one reason. I can say that the general demand for everything that goes into the United States stockpiles has been far greater than the supply, and the effect of the stockpile is not in any way important as far as exports from Canada to the United States are concerned.


James MacKerras Macdonnell: .Not to any extent?


Clarence Decatur Howe: Not to any extent. Had the materials not been sold to the United States,

Trade Agreements
whether for stockpiles or anything else, there are other markets begging for them.
Talking of conferences, I might say that the lord privy seal of England was here today, and the purpose of his visit was to obtain greater quantities of raw materials from Canada of the very same items that have been going to a very limited extent into United States stockpiling.
I think that the sessions of the committee mentioned in this resolution should be very helpful. I hope that all opposition members who have taken part in this debate will attend the sessions regularly. I am sure anyone in the house can obtain great benefit from the information that will come out of these sessions of the committee, and I commend the work of the committee to all hon, members who are fortunate enough to be members of the banking and commerce committee.


Howard Charles Green: Mr. Speaker, in spite of the very low opinion which the Minister of Trade and Commerce (Mr. Howe) seems to place on the suggestions which have been made to the house during the course of this debate today, I am going to be bold enough to put a few more thoughts before him and my fellow members of the house. I really believe that the subject is a great deal too serious, and of far too much importance to Canada, to be treated in quite the way in which it was treated by the minister in his remarks a few moments ago. However, be that as it may, I do plan to be analytical in my remarks about the Torquay agreements, and about the problem of Canada's external trade.
There is no doubt that the objective in these various negotiations held at Geneva, at Annecy and more recently at Torquay is very much worth while. That objective has been to expand trade, and I think that in each case there has been a valuable expansion of trade among the free nations. Of course the unfortunate position is that the Soviet and her satellites, as I understand-and the minister can correct me if I am wrong-have taken no part whatever in any of these negotiations, and the result must have been that the negotiators of all the countries, including those from Canada, have found the work difficult and discouraging. Our vision of a world in which there would be free trade among all the nations is certainly very far even from our imaginations under present conditions.
While there has been value in all these treaties, I do not think the minister will question that Canada, in telling the results of the treaties, has put her best foot forward

and I suppose that is only natural. I believe the United States has done the same thing. The American government, in announcing what it has gained in these various negotiations, always emphasizes the favourable side of the story, and the Canadian government ha's been doing the same thing. For example, in his statement on May 8, the Minister of Trade and Commerce pointed out that exports to the United1 States from Canada of the goods in the categories on which there had' been a reduction of tariffs granted at Torquay amounted to $120 million in 1949. He did not give the figure of the value of the goods coming to Canada on which the tariff had been reduced under the agreements, but we find this figure given in the announcement made from Washington. The Americans claim that they got reductions on trade with Canada amounting to over twice as much, the figure they give being $290,-
049,000	on United States products coming into Canada.
Their review of the results is quite interesting. I hold in my hand a clipping from the last edition of United States News and World Report of May 18, 1951, which sets out that tariff cuts negotiated by the United States with seventeen countries at Torquay involved about $500 million in imports, that being six per cent of all imports into the United States. On the other hand United States exports which got tariff benefits amounted to $1 billion in 1949, which hon. members will notice is about twice as large a figure; it is pointed out however that the figure of $1 billion would be well above any normal export year.
The statement goes on to set out that Canada and western Germany made the greatest concessions to the United States; that Great Britain and other nations of the commonwealth made no concessions at all; that France and some other countries actually raised duties on some United States export items. Then it sums up the results of the Torquay conference in these words:
Results of the Torquay conference, therefore, were not all successful. Actually, the tariff concessions negotiated are not expected to affect trade in the near future. Tariffs do not mean much when goods are scarce, demand high. Problem in world trade now is primarily to increase output of basic materials.


Clarence Decatur Howe: Hear, hear.


Howard Charles Green: The Minister of Trade and
Commerce says, "hear, hear." I believe that that summary fairly sets out the main problem today in world trade.
There is very little in the agreement which will bring down the cost of living in Canada. The Minister of Finance (Mr. Abbott) in making his speech the other evening referred to a few of the items on which there have

been small cuts, and -made special reference to grapefruit juice and half a dozen other items. But I do not believe the new agreements will give much help, so far as the cost of living is concerned. It may be that in the years ahead there will be some help for the little man; but he does not stand to gain much at the present time.
The hon. member for Vancouver South (Mr. Laing) dealt with the benefits to British Columbia, and said that these treaties were wonderful things for that province-perhaps the most wonderful trade development there had ever been from the point of view of British Columbia. I rather think the minister would not have gone that far, in so far as that province is concerned. Certainly the results are not that good. In his statement the other night the minister referred to canned salmon, plywood and base metals as being the three commodities produced in British Columbia which received the most assistance under the Torquay agreements.
The duty on canned salmon entering the United States has been cut from 25 per cent to 15 per cent, but at the same time Canada has cut her duty on canned salmon coming from the United States from 27J per cent to 15 per cent. We have always been in pretty tight competition with the canned salmon producers of Washington and Oregon, and it is too early yet to say what the results of this reciprocal change in the tariff will be.
Upon the announcement of the results of the negotiations Mr. S. M. Rosenberg, chairman of the salmon canners' operating committee in British Columbia, and president of the Canadian Fishing Company, said that Canadian costs were still too high to meet United States competition. I believe that British Columbia packers of canned salmon have never been able to get into the United States market to any large extent and, even with this cut, I doubt very much whether they will be able to do so.
As for the cut in the tariff on plywood going into the United States, I find in the same article the statement that at present British Columbia mills are going full blast to fill Canadian orders, bolstered by defence and other demands. While that may be the position at the present time, I believe the reduction in the tariff will be of benefit over the years.


Clarence Decatur Howe: They have shipped large quantities of plywood into the United States over the 40 per cent tariff.


Howard Charles Green: This statement in the article may be incorrect. Then, with regard to base metals: there, too, I believe the Americans
Trade Agreements
have been taking all they can get, and for the time being the reduction in duty will not make much difference.
The hon. member for Vancouver South also mentioned the cut in the duty on aluminum. Well, we are not yet producing aluminum in British Columbia, and will not be for four or five years; so that the benefits are not apt to accrue on that commodity for a long time. Furthermore when aluminum is produced, it is earmarked for Great Britain; so that it would not be available for export to the United States.
The minister mentioned apples. While I believe some reduction has been given by Peru in respect to the tariff on apples, Canada has dropped her tariff on apples coming in from the United States from three-quarters to three-eighths of a cent per pound and has also extended the time each year during which apples can come in free. I believe the extension is from July 12 until July 31. So that once again apples seem to be getting a bad deal. In 1947 the preference on apples to the United Kingdom was given up; certainly in the negotiations at Geneva they came off very badly.
There is one point in connection with these negotiations which I cannot understand, and that is why Canada should give away negotiating points. In the debate on the resolution leading up to the changes in the Customs Tariff, statements were made to the effect that irrigation sprinkler systems were one type of commodity under negotiation at Torquay, but that Americans would not give any concession. Yet, in spite of that fact, a change is being made in the present budget cutting off the Canadian tariff on this product completely.
I cannot understand why that has been done. Where we have been actually in negotiation on a certain type of equipment, and have been unsuccessful in getting any concessions, we turn round and, without any quid pro quo, take off the protection.


Clarence Decatur Howe: That is to help the farmers.


Howard Charles Green: I believe the farmers of British Columbia, who are the ones using this particular kind of equipment, were perfectly satisfied to have the tariff remain as it was.


Clarence Decatur Howe: They did not say so.


Howard Charles Green: The farmers will probably lose in the end, because I am afraid that once the American producers of this equipment get a corner on the market the prices will be what they can get, for the competition from a Canadian firm will be removed. I believe it is bad business to negotiate on an item such as that, and then, when our requests are turned down, to take off the

Trade Agreements
tariff entirely, thereby giving the other side the very best they could have got in the deal. I believe a mistake was made in that connection.
These negotiations and agreements really bring up for consideration a problem much deeper than that involved in the actual items covered, and that is the question as , to what is to be the Canadian policy in future years in the matter of external trade.
I believe it is clear that Canada is becoming more and more dependent upon the United States market, both in the matter of her exports and her imports. Someone pointed out today that sixty-five per cent of our exports are now going to that one country. There are certain dangers in that situation which the minister must see. One is that the basic United States policy, for as long as I can remember-probably right from the days of independence-has been to protect the American people first. The whole of their trade policy has been designed to protect their own people. The Hawley-Smoot tariff, which goes back to about 1930, is still in effect. That is still the basic United States tariff. Of course it is true that the president was given power to make reductions amounting, I think, to 50 per cent on items, and then still further power was given to him to make further reductions on the items as they stood at January 1, 1945, up to a maximum of 50 per cent. There are those provisions in the United States tariff law, but they are subject to change at any time, and the fundamental United States policy continues to be one of very high tariffs, much higher than Canada has ever had no matter what kind of government has been in power here.
Another fact which makes the situation dangerous is that Canada and the United States produce goods of the same type in many cases. On the west coast, for example, our lumber has always been in competition with the lumber of Washington and Oregon states. The same is true of canned salmon, as I mentioned a few moments ago. Our apples compete with apples from those two states, and the United States apples ripen earlier because they are grown farther south. To a degree we have had the same situation with many of our base metals. If you go right across Canada from one coast to the other you will find commodities produced by both countries. For example, there is grain on the prairie provinces and in the prairie states; manufactured goods in Ontario and Quebec and in the industrial eastern states; fishing in the maritime provinces of Canada and in the New England states to the south.
There will always be many commodities which both countries are producing, and

especially when there is no great demand for goods there is bound to be difficulty for Canada with respect to these particular commodities. The United States producer has a much larger home market. He does not have to depend on exports to the same extent that Canadians do, and for that reason our position has always been and always will be difficult.
Then there may very well be changes in the United States government. The present government has been in power for many years, and if there should be a change in the next year or two I think the minister will agree that Canada is apt to have a great, deal more difficulty in getting her goods into the United States market than she has under the present administration. Even as things are today, while the Americans perhaps have not been responsible for killing the international trade organization, certainly it is now a thing of the past, and no doubt the attitude of the United States has been largely responsible for the failure of the free nations to set up that agency under the United Nations.
Another thing we must remember is that the Americans for a long time have been attempting to destroy the commonwealth preferences. They have been against the preferential system ever since it was brought into effect. In the recent Torquay negotiations they set out to break down the preferential system. I am afraid that Canada, willingly or unwillingly, has been aiding in that attempt.
It has been pointed out today that the British preference was first created by the Laurier government about fifty years ago. Hon. members know that about 1932 the late Right Hon. R. B. Bennett negotiated extensive British preferential agreements. I do not know what their effect was in other parts of Canada but they saved British Columbia. The preferences on lumber, apples, canned salmon and metals saved our province at a time when we were in a desperate position. That was the one time when trade agreements meant a great deal to the west coast province.
Mr. Mackenzie King and the Liberal party fought the imperial preferences from start to finish. I am told there were extremely bitter debates in the house, and only one member of the Liberal party voted for those preferences, that member being Right Hon. J. L. Ilsley, who of course was representing an apple constituency in the province of Nova Scotia. When Mr. King came into power in 1935 it was not very long until he renegotiated the agreements and the preferences were reduced. In my opinion that has been the attitude of the present government right from 1935. They have looked on the imperial preferences as Bennett treaties,

and therefore as something that should be dealt with pretty harshly, to say the least. Step by step since 1935 we have found Canada whittling away at the roots of the preference system.
I have here a statement made by the present Prime Minister (Mr. St. Laurent) on March 17, 1947, when I believe he was secretary of state for external affairs. He made a statement on the situation with regard to imperial preferences. Members will find it at page 1414 of Hansard for that date. The present Prime Minister quoted a statement which had been made by Prime Minister Attlee setting out the situation of the preferences at that time, in which, and it was accepted by our present Prime Minister as correct, we find it set out there that these preferences would not be altered in the forthcoming Geneva negotiations unless all the parties thereto agreed to such alterations. The key sentence reads as follows:
There is thus no question of any unilateral surrender of preferences. There must be adequate compensation for all parties affected.
In other words if a preference was to be cut down or eliminated, all the parties thereto must agree and must get some quid pro quo. That was the situation in March of 1947. But in December, 1947, after the Geneva agreements had been negotiated we find Mr. King, who was then prime minister, making statements to the effect that any country of the commonwealth must be free to change the preferences. In fact he had a letter to that effect written to the British delegation, the stand taken being that Canada, or Great Britain for that matter, could simply give notice and withdraw the preference on any item, rather than having the items bound by an agreement for a term of years. That, of course, was going quite a lot further than the present Prime Minister had gone in March of the same year.
Then in 1949 we find the present Minister of National Defence (Mr. Claxton), who was then a minister of the government, expressing his views on the British preference. That was on October 12, at page 705 of Hansard, where the minister was answering a question asked by the late member for Broadview, Tommy Church. After the answer had been given Mr. Church said:
May I say to the hon. gentleman that the proposal also hangs preferential trade on the sour apple tree, like John Brown's body.
The reply of the minister was very short but very enlightening. He said:
That is a good place for it, too.
This question and answer had to do with the Annecy agreements, so we know exactly
Trade Agreements
where the present Minister of National Defence stands with regard to all these British preferences.


Clarence Decatur Howe: If my hon. friend will permit a question, with all this discussion of British preferences will the hon. gentleman explain in what way British preferences have contributed anything to Canada's trade position during the past ten years?


Howard Charles Green: I have pointed out to the minister what they meant to British Columbia before the war.


Clarence Decatur Howe: That was twenty years ago.


Howard Charles Green: That situation existed right up to the outbreak of war. Of course when war conditions intervened the whole trade picture was changed. I do not suppose agreements of any kind made any difference during the war. I had hoped that after the war we would be able to retain this system of British preferences.


Clarence Decatur Howe: We are retaining the system.


Howard Charles Green: I am complaining of what appears to be a constant whittling down of these preferences by the present Canadian government. I am not too sure that this government would not do away with the preferences entirely if they felt they could get away with it as far as the public were concerned.


Clarence Decatur Howe: Who would stop us? Don't take yourself too seriously. If we wanted to get away with it who would stop us?


Howard Charles Green: That is just typical of the minister; if he wanted to get away with anything who would stop him? I tell him he is not yet the dictator of this country, and he is not going to be. He grows more and more dictatorial every session. Some day the Canadian people are going to wake up and realize what a dictator they have here running this country.


Clarence Decatur Howe: Some day the people of British Columbia will wake up and see what kind of representation they have here.


Howard Charles Green: The minister need not worry about the people of British Columbia. They will take care of the choice of their own representatives without any advice from him. They have experienced his visits to British Columbia, when he flies off the handle and uses abusive language not fit for any public man. They know of his doing that. One of the great tragedies of public life in Canada today is that the minister has such little control over his temper. That anyone in such a responsible position should have so little control is tragic. I am going ahead with

trade Agreements
my remarks. If the minister does not like them he can at least keep still; perhaps someone else will have the courtesy to listen to them, whether or not he does.
I dealt with the attitude of the Minister of National Defence in 1949. Now let us go on a year and see what was the attitude of the Canadian representative at Torquay in 1950. I have here a newspaper clipping dated September 29, 1950, headed "Wilgress startles tariff parley". I have great respect for Mr. Wilgress; I think he is an excellent civil servant. He was chairman of the Torquay negotiations, and this dispatch says:
At the formal opening, chairman Wilgress said the countries represented in GATT (general agreement on tariffs and trade) must face the ''fundamental question" of eliminating restrictions on trade.
By inference he referred particularly to the British system of imperial preference which is expected to come under strong criticism.
There we have the Canadian representative dropping a pretty broad hint that Britain had better do something about giving up the preferential system. Now this year, in 1951, we have another press dispatch dated May 9, headed "Trade pacts may doom preferences". It is from Ottawa, and reads:
Canada today had seventeen new tariff and trade agreements that many observers said spelled the doom of this country's participation in the British empire trade preference system.
Then it goes on:
Officials here said Britain's failure to work out new tariff agreements with the U.S. had been "regrettable." They indicated that the failure had been partly political-a resolve to maintain the empire's trade structure for its own sake.
There you have Canadian officials again rriticizing the British for the stand they took; and in the statements made by the two Canadian ministers on May 8 we find much of the same. For example, the Minister of Trade and Commerce (Mr. Howe) had this to say at page 2830 of Hansard:
From the Canadian point of view, it is a matter of regret that these countries failed, at Torquay, to add to the substantial body of tariff concessions which they made to one another at the earlier negotiations.
Mind you, he was dealing there with the British countries and the United1 States; and the Minister of Finance also made statements much to the same effect. Tonight, I suggest, the Minister of Trade and Commerce has shown pretty clearly that he is not a very strong advocate of the British preference. Incidentally he made a statement directly contrary to that made by the Minister of Finance on May 8. Tonight the Minister of Trade and Commerce said that no preferences had been eliminated. At page 2832 of

Hansard,-on the other hand, the Minister of Finance had this to say:
. . . we agreed to the modification and in some cases to the elimination of certain margins of preference.
Somebody is wrong.


Stanley Howard Knowles: Somebody left out a comma.


Howard Charles Green: Somebody left out more than a comma. Somebody is telling one story and somebody else is telling another, and we will have to find out which is right. Then tonight the minister said these preferences do not mean anything, because even if we have them there are prohibitions and quotas put on by the British; that we cannot get into the British market and therefore, presumably, the preference system is of no value. Well, for the time being it may be necessary for the British to adopt measures of that kind. They have been in a terribly difficult -position, far more difficult than Canada has ever encountered, and they have had to take drastic steps. But because those quotas and prohibitions exist at -the present time it does not mean they are to continue indefinitely or even for very long. You know, there may very well be a change of government in the United Kingdom before the year is out. I believe it is only a matter of time until the British, the Australians, the New Zealanders, the South Africans and the Indians will be able to deal with this country on a normal basis. When that time comes, these preferences are going to be of great value to Canada. Incidentally, while Canada cut out some of the preferences she has been giving to other British countries, under these Torquay agreements we still retain our preference in the other British markets because those British countries refused to reduce any preference.


Clarence Decatur Howe: I am sure my hon. friend would not like that statement to Stand. There is no change in any preference between Australia and Canada, New Zealand and Canada, or South Africa and Canada. The only change is between the United Kingdom -and Canada, and that was with the consent of the United Kingdom.


Howard Charles Green: Was that contained in the
Torquay agreement?


Clarence Decatur Howe: The margins were reduced, but not as they affect Australia, New Zealand or South Africa.


Howard Charles Green: The statutory preference for Canada in the other British markets remains, does it not? It has not been reduced lat all by the Torquay negotiation's?


Clarence Decatur Howe: The margin has, yes.


Howard Charles Green: Not the margin in other British territory. Our margin of preference on the

goods we sell New Zealand, South Africa and Australia has been retained, because those countries did not give the United States any concessions at all; that is the point I am making.


Clarence Decatur Howe: Yes, that is right.


Howard Charles Green: I suggest that Canada should not be critical of the stand taken by these other British countries at Torquay. They only took that stand as a matter of selfpreservation. I am sure that they were not trying to make any trouble, but were doing it as a matter of self-protection.
Then, finally, a word about the future. I believe that the long-term trade policy of Canada should be to diversify our trade far more than is the case at the present time. There have been tremendous developments in this country. We are producing a great many products that we did not produce before the recent war. They will be coming into competition with United States products in just the same way as many of our primary products are in competition with similar products in the United States. I believe that our wisest course is to diversify to the greatest extent possible.
For that reason, not only should we seek to promote trade with all nations, for example in South America and Asia, but also I believe the preference system should be retained. Little has been said today about trade with Australia and New Zealand, but for us on the Pacific coast it has always been of great importance. We believe that trade with these sister nations, and with other nations across the Pacific, could develop to a greater degree than trade with nations in any other part of the world. I would hope that Canada will always retain the preferential system for her dealings with other nations of the commonwealth. It may be necessary to alter that system from time to time, but I do believe that the plan is a sound one. I believe also that it may turn out that Canada will have good reason to be grateful to the other British countries for their refusal to abandon the preference system at Torquay. After all, the essence of that preferential system is to increase trade amongst the British countries. Here we had the United Kingdom, Australia, New Zealand, South Africa and India refusing to give up that preferential system-


Mr. Deputy Speaker:: Order. I must inform the hon. member that he has now exhausted his time.


Howard Charles Green: In conclusion, Mr. Speaker, may I suggest that probably the best thing we could do would be to endeavour to persuade the United States to change from a high tariff
Trade Agreements
policy. If she altered that policy and became a low tariff nation, I believe that would be the greatest contribution that could be made to freeing the trade between all the countries of the world today, because the United States is undoubtedly the leader. I suggest that Canada's main effort should be to endeavour to encourage the United States to take a step of that kind.


Heber Harold Hatfield: Mr. Speaker, the Minister of Trade and Commerce (Mr. Howe) has been talking about the importance of the Torquay agreements to the maritime provinces. Before these agreements were tabled, there was a press dispatch in the Citizen of May 5 stating that Canada was receiving the same concessions from Cuba as the United States was receiving. After the agreements were tabled we found out that this was not the case. On May 8 the Minister of Trade and Commerce said at page 2829 of Hansard:
In the case of Cuba, I wish to make an announcement of considerable importance.
He then said that Canada was going to buy 75,000 tons of raw sugar from Cuba which would be distributed to the Canadian sugar refineries. He goes on and says:
The Cuban government has now undertaken to revalidate until January 1, 1954, important tariff concessions which were originally granted to Canada at Geneva, including amongst others, codfish, wheat flour and potatoes. This will be of definite interest to our maritime provinces.
Now, we received no advantage from the Geneva agreement in respect of either potatoes or fish. The only advantage received at Torquay was a fractional reduction on codfish in the Cuban market. The Cuban market was the greatest market the maritime provinces ever had for potatoes, fish, lumber, apples and other commodities. Since the freight rates to the central provinces have advanced, we cannot ship to the central provinces. The only markets the maritime provinces have are in Cuba, South America and the United States, and those are the only markets that are any good to us. I do not say that reciprocity is any good to us. I do say that while there is a favourable government at Washington, this government should negotiate a long-term treaty arrangement with the United States so that the maritime provinces can exist.
I should like to know what the minister meant by that statement on May 8. The Torquay agreements even took four of the concessions away that Canada did have. The only concession given to Canada was a fractional reduction per hundred kilos on codfish. There is very little advantage to the maritime provinces from this Torquay agreement. So

Trade Agreements
far as I can see the only concession that was any good to my constituency was a reduction on ground oats to the United States from 25 cents a hundred to 12J cents a hundred. That was the only concession that my constituency received, and that was the only concession the province of New Brunswick received. The member for Vancouver South (Mr. Laing) spoke about a reduction of 50 per cent in plywood. This treaty only covers Douglas fir plywood, and that plywood is only manufactured in the province of British Columbia. No Douglas fir plywood is manufactured in any other province.


Clarence Decatur Howe: There is birch plywood.


Heber Harold Hatfield: There is birch plywood, and the reduction there is only 5 per cent.


Clarence Decatur Howe: 25 per cent.


Heber Harold Hatfield: There is little or practically no advantage to the maritime provinces. He says: In the case of Cuba I wish to make an announcement of considerable importance. Is there going to be a reduction? Are we going to receive anything further? Is (there going to be any other agreement with Cuba so that, by taking this raw sugar, we might have the same concessions that the United States have with Cuba? Before the West Indies treaty we shipped there immense quantities of potatoes and fish, and that was a great market for the maritime provinces. Since the West Indies treaty went into effect we lost the Cuban market. Cuba immediately retaliated with an exceedingly high duty against fish, flour, potatoes and lumber from Canada; and we have lost one of our best markets.
We in the maritime provinces must have trade agreements with Cuba, South America and the United States in order to exist. When this article came out in the Ottawa Citizen of May 5-I do not know where they obtained this statement-it built up high hopes in the maritime provinces that we were going to receive in Cuba the same concessions as those received' by the United States. Since the West Indies treaty, the United States has had all the table potato market in Cuba. We have never been able to ship any commercial potatoes from the maritime provinces. What we did receive was a reduction in duty or freedom from duty on seed potatoes. What Cuba cannot grow from our seed, she buys from the United States. Cuba has been a great market for the United States, since the West Indies treaty came into effect. The West Indies treaty is now blocked. We have our ships going down there empty. It is costing us an enormous amount of money to keep those five ships which, by that agreement, we agreed to put on that West Indies trade.

We get no advantage. Those ships are losing money. They are going down empty. We have blocked sterling. We get a permit to ship a few tons of potatoes once in a while, but they hardly ever make up carload lots. With the quotas we get from the West Indies, the market is practically finished down there for our fish and potatoes. I hope this government will make with Cuba, the West Indies, the United States and South America a treaty that will help the maritime provinces.


Percy Ellis Wright: Mr. Speaker, I just wanted
to ask the Minister of Trade and Commerce (Mr. Howe) a question based on the statement he made a few minutes ago with regard to Canada's shipping wheat to India. According to this trade report, we have shipped to India 11,200,000 bushels under the international wheat agreement. We have not shipped any to India outside of the international wheat agreement, have we?


Clarence Decatur Howe: No. We have made all our
shipments under the international wheat agreement. The United States will make their shipment of two million tons under the international wheat agreement, I hope. Russia has sold wheat not under the international wheat agreement, because it is not a party to that agreement. China has sold wheat to India.


Percy Ellis Wright: According to these trade
figures, the United States has shipped
27.773.000	bushels under the world wheat agreement and Australia has shipped
15.589.000	bushels, as compared with Canada's 11,200,000 bushels. The United States, I believe, have now passed a bill authorizing the shipping of another two million tons which, If they make delivery, will be about a further 70 million bushels on top of the 27,773,000 bushels they have already shipped. As mentioned by the minister, I do not think we have as yet fulfilled all our obligations to India.


Clarence Decatur Howe: We would have shipped much more had we had the wheat available when India made the inquiry for further wheat. Unfortunately we had only enough milling wheat to take care of part of the commitment. We offered No. 5 wheat but India did not wish to take No. 5 wheat. All we can ship is what we have.


James MacKerras Macdonnell: I wish to
ask a question of the minister. A few minutes ago he said that our exports to the United Kingdom were greater than those in any pre-war year. Was he measuring in terms of dollars or goods?


Clarence Decatur Howe: Dollars.
MAY 2iri9Sl


James MacKerras Macdonnell: I wonder
Why the minister would give us a figure of that kind? Does he not think that is very misleading? You cannot eat dollars.


Heber Harold Hatfield: The minister has not
answered my question as to what concession the maritime provinces received from Torquay, outside of that with regard to codfish.


Mr. Deputy Speaker:: Order.


Clarence Decatur Howe: We are not in committee, but
to answer the question as to what concessions they received at Torquay, the principal concession was an extension for three years of the agreements they made at Geneva. I may tell my hon. friend that it took long and difficult negotiations to get that extension; and without the sugar purchase the concessions made at Geneva would have been cancelled as far as Canada is concerned. If that is not a concession, we got nothing-if my hon. friend says that is of no value.


Heber Harold Hatfield: What did the maritime
provinces get with regard to fish and potatoes in the Cuban market at Geneva?


Mr. Deputy Speaker:: Order. Is it the
pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to.
Alphonse Fournier: that the house go into committee of supply.



PROPOSED AMENDMENT TO BRITISH NORTH


Edmund Davie Fulton: Before this
motion carries, Mr. Speaker, there is a matter which I wish to bring to the attention of the house. It concerns the proposal which has been made by the federal government to the various provincial governments to amend the British North America Act so as to enable the provinces to impose an indirect sales tax or turnover tax of 3 per cent. This proposal has been the subject of a great deal of criticism by private individuals, by the press and by some of the provincial governments across this country. It is to be hoped that the proposal is dead and that the government will not proceed with it. But because we have not had that assurance and because the time when these amendments to the British North America Act must be passed, if they are to be passed, is coming closer and closer, we in the official opposition think that it is timely to ask the house to express its opinion in opposition to any change in the constitution
Turnover Tax
whereby the provinces will be given the power to levy an indirect 3 per cent sales tax.
It may be helpful, Mr. Speaker, to review briefly the history of the proposed amendment to which I have referred. It was discussed at the recent dominion-provincial conference and it was at first suggested-and it certainly became generally accepted in the mind of the public-that the proposal for the 3 per cent sales tax was in part at any rate to enable the provinces to bear their share of the increased cost of the revised old age pension scheme. So for a time, as I will show, certainly in the minds of many of the provincial premiers and in the mind of the public, it was assumed that the two proposals-the revised old age pension scheme and the constitutional amendment on the 3 per cent sales tax-went hand in hand and that one was dependent on the other. In the course of a recent discussion in the house the Minister of National Health and Welfare (Mr. Martin) to some extent confirmed that that had been the impression, when he said that it was suggested that the two might conveniently be considered together.


Paul Joseph James Martin: One never depended on the other, and that was clearly stated in the house.


Edmund Davie Fulton: The minister has said that one never depended on the other. I have said, and as the correspondence with the provinces shows-I will refer to that correspondence in some detail-certainly the provincial premiers were under the impression that one was dependent upon the other, and it was suggested by the provincial premiers that they be separated, and they stand now on an entirely separate and independent basis.
The proposal to amend the constitution to allow the provinces to levy an indirect sales tax was first put forward in the following form, and I am reading the correspondence which has appeared at various times as appendices to Hansard. In the appendix to Hansard for February 1, 1951, at page 43, the following proposed amendment is set forth:
2. Re-enact head 2 of section 92 to read as follows:
"2. The raising of revenue for provincial purposes by
(a)	direct taxation within the province, and
(b)	indirect taxation within the province in respect of the sale of goods (except goods sold for shipment outside the province) to a buyer for purposes of consumption or use and not for resale, at a rate not exceeding three per centum of the sale price, but not so as to discriminate between sales of goods grown, produced or manufactured within the province and sales of goods grown, produced or manufactured outside the province."

Turnover Tax
It became obvious to the government that the proposed sales tax would be attacked, as it has in fact been attacked, and therefore efforts were made to offer the proposed amendments in various particulars so as to make it more palatable. We find, for instance, the following letter from the Minister of Justice to the premiers of the provinces, as reproduced at page 45 of Hansard of February 1. I am reading in part. There was a growing feeling across the country that this tax was unpopular and undesirable and the Minister of Justice went on to say:
Apparently the attack will be made partly on the plausible ground-
These are rather odd words, I think, Mr. Speaker, to come from the Minister of Justice in discussing the proposal which the federal government had put forward, seriously and honestly it is presumed, to the provinces. These are his words:
Apparently the attack will be made partly on the plausible ground that if provincial governments are allowed the right to levy indirect sales taxation, they may discriminate between different classes or types of retailers based on their residence-
Then he went on to say:
You will recall that it was on this general ground that a somewhat similar proposal was defeated in the Senate in 1936.
And so the Minister of Justice submitted to the provincial premiers on January 20, 1951, the following words to be added to the proposed amendment:
And not so as to discriminate between sellers or classes of sellers of the same class of goods.
Well, Mr. Speaker, the fact is that this proposal to allow the provinces to levy an indirect sales tax may be attacked on a number of grounds. Whether the minister may classify some of them as plausible or not, the fact is that it is a bad tax, and every ground of attack which I have seen mentioned in any of this correspondence, or in the newspaper articles dealing with the subject, is a valid one because the tax is a bad tax, and when it is examined and analysed it does not stand up. It is clearly shown to be contrary to the best interests of the Canadian people to transfer to the provinces this power to impose this type of taxation. And indeed the arguments which are used by the provinces and by those people in newspapers and elsewhere against this tax in the hands of the provinces apply with equal force to the use of this type of taxation by the federal government. The whole subject, Mr. Speaker, is closely related to the discussion which recently took place in connection with the budget, and the proposals to increase the general sales tax. The same arguments against this form of indirect taxation apply in both cases.

Well, then, another objection to the proposed tax became evident when it was seen that some of the provinces, at any rate if these amendments were passed, would use the authority contained in the amendment to apply the indirect sales tax to more than the retail sales of goods; that is, on other things besides goods, on services, and so on. This becomes clear when one reads the letter from Premier Campbell to the Minister of Justice, reproduced at page 991 of Hansard for March 6, where he said:
This proposed amendment deals only with the sale of goods. It would therefore presumably not apply to such things as electrical power, or services provided by laundries, theatres, hotels, restaurants, barber shops and the like. It was our understanding that this amendment should enable the province to impose this type of tax wherever it is a more convenient method of raising revenue from the people in the province who get the benefit of goods and services available in the province. It therefore seems to us that the proposed amendment should make it clear that it covers these other types cf industries, which provide services directly to the consuming public.
In that approach to this problem the objectionable feature of this tax becomes most obvious when it is to apply not only to the retail sale of goods but also to services provided by laundries, theatres, hotels, restaurants, barber shops and the like, wherever it is a more convenient method of raising revenue, wherever it may be conveniently hidden so that the people will not know in fact the extent to which they are being taxed. There was another letter from a premier showing that the tax would be enlarged from the original proposal, as found in the letter from the premier of New Brunswick to the Minister of Justice, dated February 2, in which he says:
As to the second proposed amendment involving constitutional changes which would permit the provinces to impose indirect taxation by way of a sales tax, we feel that the proposal advanced will not meet the situation of the provinces, fixing as it does the maximum tax that could be levied thereunder at three per cent.
In our view the main and overriding purpose of such an amendment is to be found in the advantage which would accrue to the provinces through being able to impose such indirect taxation in lieu of a purchasers' or consumers' tax such as is now found in five of the provinces.
He went on to say:
We would strongly urge that the federal government amend its proposals to permit the imposition of a tax at a higher level; to meet our situation it should be at least four per cent.
Then a letter from the premier of Nova Scotia contains a somewhat similar suggestion. This is the letter of March 12, and is found at page 2729 of Hansard. The quotation is as follows:
I should like, however, to repeat what I have already said in my memorandum which accompanied

my letter of January 19. That was that the amendment constitutes the sole source of the provinces' power to impose an indirect tax. It ought, therefore, to be sufficiently wide in its terms to authorize any tax which it is contemplated the provinces should have a right to impose.
Therefore it becomes clear from this correspondence, Mr. Speaker, that some of the provinces at any rate intended and feel that they should be allowed to use this constitutional amendment, if it passes, not merely to impose a limited three per cent tax on retail sales, or retail turnovers on sales of goods, but to impose indirect taxes on all forms of commercial transactions, on the rendering of services, on amusements, on theatres, hotels, and on anything else, as Premier Macdonald says, on which it is contemplated the province should have a right to impose such a tax. As we have seen, some provinces felt it should be a higher rate even than the three per cent rate at first suggested.
Then, coming back to the question as to whether or not the two constitutional amendments were at first considered together, I should like to read a few letters to make it clear that they were at first considered together. But the point I wish to establish by these references is that it is not necessary that the old age pension amendment must be accompanied by the sales tax amendment.
That being so, and that being clearly agreed and established-and it must be said that it was a pity that the confusion was ever allowed to develop; and the purpose of the amendment I intend to move is to enable the house to express its opinion-I hope nothing further will be heard of the proposal that this undesirable, discriminatory and vicious form of taxation should be imposed, thereby increasing the already heavy burden of inflation and high taxation being borne by the Canadian people.
I am convinced that, when the people of Canada realize they do not need this proposed sales tax amendment in order to have the amended old age pension scheme, they will speak even more clearly and unequivocally against the sales tax amendment than they have up to the present time. But it was necessary for provincial premiers to make the first suggestion that the two constitutional amendments should be considered separately. This will be seen from consideration of one or two letters. For instance, there is the letter from the premier of New Brunswick to the Minister of Justice, as set out at page 2734 of Hansard. Reading from that letter, as it is continued on page 2735, the premier said:
The government of this province would welcome an assurance from you that so far as the federal
Turnover Tax
government is concerned the two amendments are not inseparable; and in particular that the old age pension amendment will not stand or fall with the other.
And in another passage:
On the assumption that general agreement is arrived at with the provinces on both proposed amendments we have another suggestion to offer. It is that the matters should be dissociated when laid before parliament. In other words they should, in our view, be made the subject of the two separate joint addresses.
And then at page 2736, in a letter of April 16, addressed to the premier of New Brunswick, and copies sent to all the other provincial premiers, the Minister of Justice makes it clear for the first time in this correspondence that the two proposals will be considered separately, when he says as reported at page 2736:
In line with the thought that these two constitutional amendments are separate and distinct, we are quite agreeable, if the provinces wish it that way, that these two constitutional amendments should be made the subject of two separate joint addresses to be presented to the parliament of Canada requesting respectively that these two constitutional amendments should be passed by the parliament of the United Kingdom.
There are other extracts from letters of provincial premiers I could read, to the same effect. But the extracts I have read make it clear that it was at the suggestion of the provincial premiers, first, that the two constitutional amendments were separated. So that we are now in a position clearly where the one is not dependent upon the other.
That being so, it seems to me that this house should and must approach the question of the proposed sales tax amendment on its merits, and not be moved in any sense or influenced, or be placed under any pressure to approve of that proposal because we are told, or because we may be told, or because it may be suggested or has been suggested, that without it we cannot have the old age pension plan.
Turning, then, to the merits of the sales tax amendment proposed to the provinces by the federal government, this can and should be said, that the proposal is one which envisages the imposition of a tax by the provinces of Canada which is undesirable, vicious and unnecessary. I have said, and I repeat, that the arguments used against the sales tax at the provincial level apply, in my view, with equal force to any proposals to increase or to apply the sales tax at the federal level.
But I said that the tax in the hands of the provinces is unnecessary. The provinces can now levy a direct retail purchase tax. That is done by several of the provinces, the one with which I am most familiar being the one in British Columbia where there is a 3 per

Turnover Tax
cent retail purchase tax, which is perfectly constitutional because it is completed on the purchase and collected at the retail level. It is not an indirect tax. That tax yields in one year, in round1 figures, at the rate of 3 per cent the sum of $28 million to the provincial treasury-and that is from a population of approximately 1,200,000 people. So that it is not essential to have a constitutional amendment in order to enable the provinces to levy a retail tax, even if it is desired to do so.
Then, other objections to the tax, on its merits, are that these forms of indirect tax, such as contemplated in the proposed amendment, are multiplied from the time they are imposed at the source, all the way down the line, through the hands of the distributor and the retailer to the consumer. So that the tax itself is multiplied many times over in the ultimate purchase price of the commodity. To that extent they are directly inflationary, which is of course the main objection to this type of taxation.
On motion of Mr. Fulton the debate was adjourned.
IMMIGRATION	-



COUNT JACQUES DE BERNONVILLE


Hon. W. E. Harris (Minister of Citizenship and Immigration):: Mr. Speaker, if I might have unanimous consent to revert to the order for motions, I would table certain documents requested some weeks ago by the hon. member for Bonaventure (Mr. Arsenault).



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we will move again to go into committee of supply, and continue this most interesting debate.


Edmund Davie Fulton: I shall not be long.


Alphonse Fournier: And we will listen to the amendment-and see if it is in order, Mr. Speaker.
Following that we will take up Bill No. 198, to amend the Customs Act; Bill No. 293, respecting Units of Length and Mass; Bill No. 191, to amend the Prisons and Reformatories Act; Bill No. 192, to amend the Petition of Right Act, and, last, Bill No. 322, respecting the Canada Post Office.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, May 22, 1951